DrumBeat: August 1, 2008

(Bloomberg) -- It's absurd to argue that ending the moratorium on drilling off parts of the U.S. coasts would quickly bring down the high price of gasoline.

...To get around the fact that it would be a decade or more before any oil would be likely to flow, a few partisan analysts have said that the cost of gasoline would fall right away. They argue that the prospect of additional oil supply in the future would lead oil companies to produce more oil immediately because they would expect prices for crude to be lower later on.

Well, wouldn't that depend on whether a producer had the capacity to pump more oil today, and whether it thought lifting the moratorium would add a significant amount of oil to future supply relative to future demand?

HOUSTON - Oil giants Chevron Corp. and Total SA wrapped up a string of gargantuan, record-breaking earnings reports Friday, a stretch in which six of the major international oil companies topped $50 billion in combined profit for the first time.

While the profits of unparalleled size have brought withering criticism from Washington and disgust from consumers across the country, very few were surprised. Crude prices during the second quarter were nearly double what they were a year ago.

Although the Web is rife with complaints from car owners who say ethanol damaged their engines, ethanol producers and automakers say it’s safe to use in cars. But smaller engines — the two-cycle utility engines in lawnmowers, chain saws and outboard boat motors — are another story.

Benjamin Mallisham, owner of a lawnmower repair shop in Tuscaloosa, Ala., said at least 40 percent of the lawnmower engines he repairs these days have been damaged by ethanol.

Ford Motor Co., which currently sells one trim level of one model that requires premium fuel, is now bragging in a press releases that not one of the cars and trucks in its 2009 lineup (except that one trim level car) will require premium fuel.

That's right, a car maker that essentially does not make and has not made something is pleased to announce and that it will continue not making that thing, all in the name of saving its drivers cash.

(Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, plans to start crude production at the offshore Tupi field in the first quarter of 2009.

The initial output will be between 20,000 and 30,000 barrels a day, Petrobras Chief Executive Officer Jose Sergio Gabrielli said today in London. The company and partners will ramp up production at the pilot project to 100,000 barrels a day in 2010.

PORT HARCOURT, Nigeria (Reuters) - Rival armed factions in Nigeria's oil-rich Niger Delta battled in an apparent turf war for the second time this week, killing at least one civilian, security officials said on Friday.

Dozens of armed men exchanged gunfire in Abonnema, around 14 km (9 miles) west of the main oil industry city of Port Harcourt.

"Today's clashes were between two rival armed groups involved in bunkering (stealing oil) who were fighting over territories. One civilian was killed," said Lieutenant-Colonel Sagir Musa, army spokesman for Rivers state, whose capital is Port Harcourt.

Across the United States, there are about 600,000 bridges. The Federal Highway Administration reported in 2006 that one quarter of the nation's bridges were at risk. The American Society for Civil Engineers said in 2006 that it would cost nearly $10 billion every year for the next two decades to fix them.

But the funds used to repair and maintain the country's bridges and highways are drying up. Some of the money comes from the Highway Trust Fund, which Americans pay for through taxes on gasoline. Faced with higher gas prices, more commuters are carpooling, taking mass transit or driving less, about 4 percent less in May alone compared with a year ago.

The federal Department of Transportation predicted taxes will fall far short of what's needed for improvement projects -- leaving many projects delayed or even canceled.

PARIS (AFP) — The Total oil group raised its adjusted first-half net profit by 15 percent to 6.977 billion euros on high oil prices, but warned on Friday that world oil production capacity remained tight.

ROLLA, Mo. - Barack Obama is once again betting that his eloquence can persuade price-weary consumers — read that as voters — to take the long view and not jump at a short-term fix when it comes to soaring energy prices.

LONDON, England (CNN) -- Would you still watch your favorite television program if you had to cycle for an hour before you could view it?

Couch potatoes will be horrified, but fresh advances in human-powered technology -- where users power appliances through their own motion -- could one day see a 'workout-to-watch' scenario become reality.

OTTAWA (Reuters) - A major national park in Canada's Arctic has been largely closed after record high temperatures caused flooding that washed away hiking trails and forced the evacuation of tourists, an official said on Friday.

(Reuters) - Oil producing countries outside OPEC are still struggling to respond to booming energy demand from China and other emerging markets despite record high oil prices of more than $147 a barrel.

Some analysts even believe non-OPEC supply of conventional oil may have peaked for now.

A Reuters survey of 10 analysts put the consensus forecast for non-OPEC oil supply in 2009 at 50.3 million barrels per day (bpd), up 470,000 from the consensus forecast for 2008.

Non-OPEC supply in 2008 is forecast at 49.83 million bpd according to the poll of 11 analysts, which compares with 49.56 million bpd estimated in the previous survey in May.

MEXICO CITY: Mexican state oil company Pemex's decreased oil production in the second quarter of 2008 was primarily the result of a 15.7 percent drop in heavy crude output associated with the natural decline in the Cantarell field, E&P subsidiary (PEP) deputy director of planning and evaluation Vinicio Suro said in a webcast.

Now the nation is in knots over whether and how to modernize the 70-year-old company and find new sources of oil before Mexico's easy-to-extract oil goes dry.

Mexico is already a net importer of gasoline — most coming from the United States — as it's unable to refine enough oil to meet its demands. Within a decade, Mexico could compete with the United States for ever-scarcer barrels of imported oil.

Oil production in Mexico — until recently the second largest oil exporter to the United States, after Canada — is falling precipitously because output at the Cantarell offshore oilfield is declining faster than expected.

Sprott says he will continue to go long on gold, versus currency, and energy, based on his belief in the peak oil theorem, and short American financials and housing. That will not change “until lenders are willing to lend”, he says. It is currently cheaper to buy a house than build one.

WASHINGTON - School districts could get help in coping with rising fuel costs, a looming crisis that threatens to blow holes in budgets throughout the state next school year, under legislation proposed by Sen. Chuck Schumer.

Good news for pro-drilling forces: The latest Quinnipiac University poll of battleground states finds that 60 percent of likely voters in Florida support allowing drilling for oil and gas in areas offshore that are now protected.

The common theme here is air-conditioning. Air-conditioning is not an inalienable right, but in a culture of constant comfort with an everyday disregard for the "energy crisis" if it is going to interfere with a personal crisis, it is sometimes treated as such. Climate control is not, after all, what the English political philosopher John Locke was pointing a finger at when he made a philosophical fuss about our natural rights.

Twenty-five years ago this summer, prospects for a nuclear-powered Northwest imploded. In what was then the nation's largest municipal bond default, the Washington Public Power Supply System told creditors it could not make payment on a $2.25 billion debt it incurred to build two large nuclear plants. Today, as we contemplate regional energy options, the Supply System's abandoned projects still cast a shadow.

T. Boone Pickens is a Republican billionaire from Texas who handsomely funded the Swift Boat campaign against John Kerry. Carl Pope is a veteran of the environmental movement, executive director of the Sierra Club and fierce critic of both George Bush and John McCain.

That the two men are in furious agreement on the need for a radical overhaul of U.S. energy policy, Mr. Pope said, says something very bad about the recent state of politics.

In recent years, deadly heat waves have killed dozens to hundreds of people at a time in various U.S. cities, often catching local officials unprepared. Climate scientists say more killer heat waves lie ahead with global warming, and city officials are taking note.

Obama says the rebate would be financed with a windfall profits tax on the oil industry.

"This rebate will be enough to offset the increased cost of gas for a working family over the next four months," Obama said in remarks prepared for delivery Friday at a town hall meeting in the crucial swing state of Florida.

Americans, the world's most avid gas guzzlers, finally responded to higher prices. They drove about 10 billion miles less in May than they did in the same month last year. They are trading in their SUVs for more sensible vehicles. As oil prices rose by two-thirds, American oil consumption fell by 900,000 barrels a day between the first quarter of 2007 and the same period of 2008.

Unfortunately, a large share of the world's population is not responding to high energy prices. Across the developing world, governments are subsidizing energy, blunting the incentive to conserve by keeping prices low. They are absorbing the savings made by industrial countries and helping to raise oil prices by stoking demand.

The debate is not new. It is raging ever since this civilization got addicted to the black gold. It continues to this date, and the reason is simple. Being a finite source, ultimately it has to end. The question is when and not if. Many times in the past too, there have been talks that the world is running out of crude. Yet those turned out to be false calls.

Turning off the oil tap in the Middle East will be a game-changer for Israel, the region and the world. After oil, the Arab regimes will lack the capacity to vilify and terrorize Israel. Israel (as one of the few non-oil driven economies in the region), will hold the keys to building a post-oil economy.

This definitely isn’t a fair-and-balanced view of Peak Oil or fossil fuels; the authors take a clear position that traditional energy production is peaking and we need to make immediate, massive investment in renewable forms of energy.

Whatever one thinks about peak oil and the power of speculators there is no doubt that oil prices falling farther is the best possible scenario for the economy at large. It would provide the quickest improvement to discretionary consumer spending, not to mention peace of mind.

The next few months will be rocky. Let's hope the monetarists win the argument - and that this time the liquidity tap is eased down before the next bubble forms.

As the global oil crisis deepens, countries across the world are scrambling to reassess their options. South Africa is no exception to this trend, and South Africans, who have felt the pinch of escalating petrol prices in recent months, are glancing towards government for viable solutions.

A commenter with the screen name LimeSarah said she only reads a couple of blogs that discuss issues relating to peak oil -- Casaubon's Book and The Oil Drum (this, it should be said, is written predominantly by men) -- because they're two of the "lowest-panic" ones she's found.

"I'd love to hear more people talk about it," she says, "but most sites tend to have the typical macho Mad Max guns-in-a-bunker mentality."

WASHINGTON — Americans want their next president to invest in new energy sources and won't penalize a candidate who says they need to change their habits to conserve, according to the latest USA TODAY/Gallup Poll.

The poll, taken last Friday through Sunday, found wide support for many proposals advanced by Democrat Barack Obama and Republican John McCain, their parties' presumptive nominees. Obama's ideas had broader support, and he was viewed as better able to handle energy issues. But 21% said neither candidate would do a good job.

Energy and gas prices top the list this year when voters are asked what's extremely important to them in choosing a candidate.

(Bloomberg) -- Congressional Republicans, confronted with a slowing economy, an unpopular president and ethics embarrassments that threaten a wave of voter wrath, are clinging to a political lifeline: drilling for oil.

Republican demands that Congress open new areas to drilling to address record gasoline prices have put Democrats on the defensive. Several measures unrelated to energy legislation have languished as Republicans blocked Senate Majority Leader Harry Reid's bids to change the legislative subject away from drilling.

WASHINGTON - In a summer of nationwide anguish over fuel costs, Congress' attack on soaring gasoline prices has been full of high-octane rhetoric and low-energy results.

Both parties instead have fought bitterly for weeks over who can make the best political points for the November elections, with Republicans pressing for more domestic oil drilling and Democrats railing about oil company profits.

At this technological minute, the only realistic choices for the decades ahead seem to be more electrification of everything or a partial rerun of the 19th century. There is also little question that electricity is going to become much more expensive. Coal, nuclear plants, natural gas and the construction of nearly everything to do with producing more energy is becoming much more expensive. We simply are going to have to figure out how to keep going with much less. We will need much more energy-efficient homes, offices, vehicles and appliances - or do without.

Peak oil proponents and fellow cultists in the climate change camp must be scratching their heads over the recent dip in crude oil prices. If oil production has peaked, its decline irreversible, and global demand continues to rise, why would prices drop?

On the basis of peak oil theory, investing in oil futures should be a no-brainer: Go long until the world ends.

ABUJA (Reuters) - Nigeria's crude oil production fell by 150,000 barrels per day after Monday's militant attack on a major pipeline in the Niger Delta, an official with state-run oil company NNPC said on Friday.

State and local government spending has been rising three times as fast as revenue amid warnings from governors that their finances are nearing crisis stage.

As many Americans face stagnant wages, high gas prices and job uncertainty, new government figures show that state and local governments boosted spending 7.8% in the second quarter compared with 2007 while revenue rose 2.5%. Government is on a hiring binge, too, even as private-sector jobs disappear.

It's a sure sign electric cars have a future when they're catching on in Texas. Others here, too, are abandoning the family car and driving to the office in what appear to be fancy little golf carts. Small battery-powered vehicles have been on the market for years but have mainly been used by workers driving around factories and university campuses.

The small cars are powered by batteries charged by plugging them into regular 110-volt house current. Though they do look like golf carts, they have heftier frames and more powerful engines. Now, with high gasoline prices driving booming sales, many are going to ordinary folks like the Peterses, who have fallen in love with gasoline-free transportation.

The logic goes like this: Despite all the talk of “peak oil,” big producers in OPEC, and Russia and Mexico could tap 8 million to 10 million barrels per day of new oil — if they got the right market signals. That new supply would be enough to meet the world’s oil demand in the next decade, buying time to gradually shift over to a less oil-intensive economy without the whiplash oil-price volatility of recent months.

The rub, according to this theory, is those market signals. Though oil-consuming nations worry about security of supply, oil-producing nations worry about security of demand. If OPEC and other big producers were sure that expensive, long-term investments in new production capacity would find willing takers, they would pony up to pump the extra oil. But with all the talk in the West about curbing oil demand, the theory goes, oil producers are thinking twice about investing in new capacity.

Buyers are so eager to start saving gas with the nation's best-selling hybrid that they're paying more for a used Prius than they'd pay for a new one if they were willing to wait.

Driven by gas prices and waiting lists for new Priuses at many dealers, buyers paid an average $27,945 in June for a 2008 Prius with an average 8,000 miles on it — about $1,300 above the average transaction price for a new one, Power Information Network found.

DETROIT — General Motors said Friday that its losses widened to $15.5 billion in the second quarter as North American sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.

HOUSTON (AP) -- Lifted by record crude prices, Chevron Corp. (NYSE:CVX) says its second-quarter profit rose 11 percent from a year ago, capping another round of massive earnings for the major oil companies.

Talks are continuing between French power giant EDF and British Energy, according to reports, despite a shock announcement from EDF in the early hours that it had backed out of a £12bn deal to take over the UK nuclear power operator.

China is steadily strengthening political and economic ties with small, landlocked Kyrgyzstan, with one eye on the sizeable energy reserves of its neighbors to the north and west. At the same time, Kyrgyzstan's dependence on Chinese income and infrastructure grows deeper by the day.

LONDON(Reuters) - British Airways' profit collapsed in the first quarter as high oil prices, an economic slowdown and weak consumer confidence combined in what the airline called the worst trading conditions ever.

The start of production of the South African super-thin solar-panel innovation has been delayed by more than six months due to technical challenges with the equipment at the purpose-built German plant.

Production was expected to start earlier this year, but is now anticipated to kick off in October, says a source close to the project.

With increasing acceptance that for the short term at least, continued use of fossil fuels is essential to keep the lights on, is it time we started looking at fossil fuels in a new light? This was one subject of debate at The Energy Institute's recent event, Energy in Transition.

Arguing the case for A new dawn for coal in Britain, Jon Lloyd, Chief Executive of UK Coal urged that if coal is essential to address the energy needs of here and now: "it is surely better that we use local coal than import it half way across the world."

"We found that in fish that do have temperature-dependent sex determination [TSD], a rise in water temperature of just 1.5 degrees Celsius can change the male-to-female ratio from 1:1 to 3:1," says Piferrer, the study's co-author. In especially sensitive fish, a greater increase can throw the balance even more out of whack. Ospina-Alvarez and Piferrer have found that in the South American pejerrey, for example, an increase of 4 degrees Celsius can result in a population that is 98% male.

SACRAMENTO, Calif. - Five states led by California on Thursday gave notice of their intent to sue the U.S. Environmental Protection Agency if it does not act soon to reduce carbon emissions from ships, aircraft and off-road vehicles.

Cutbacks also come on news that the auto maker is making a radical shift in its future product mix away from trucks and sport-utility vehicles and towards small, more fuel efficient cars. Last week, Ford posted an $8.7 billion loss, its largest quarterly setback in its history. Its new strategy counts on Ford introducing some of its European models into the U.S., sparking speculation that new vehicle design could be curtailed and could make a shift the balance of power in product development away from Dearborn.

There is no longer a need to specifically design cars for the American market.

All modern cars are far safer than any built 30 or 40 years ago. I cringe when I think of the vehicles I rode in/drove when young and immortal. Obviously it would come off worse in a collision with an SUV, but I have seen a head on collision between a medium sized car and a 15 tonne coach. The occupants (staggered) away. This size of car is very common here in the UK, yet the road accident death rate is far lower, even allowing for the extra vehicle miles driven in the US.

The products of Mercedes Benz and Volvo of 30, if not 40, years ago were far ahead of their time. As a student working my way through school, I scrounged junk yards for cheaper parts when needed. I saw a number of Mercedes there and I never saw one where the accident did not look survivalable with minimal injuries if the occupants had been wearing seat belts.

The collision I saw was over 20 years ago, and yes, it was a Volvo. Seat belts were (fortunately) compulsory even then.
I saw a head-on crash between a Saab and another car 30 years ago, the Saab was barely scratched, the other car a write-off.

Most modern cars are designed to be a write-off in the event of a serious crash. The cars will crumple and absorb the impact of the crash. This protects the passengers from much of the force of the impact.

I'm sure I read an account of an old pickup colliding with a modern car. The modern car looked trashed, the pickup had a slight dent. However the passengers of the pickup were more seriously injured than the passengers of the modern car.

I survived a frontal collision with a truck in a Mercedes 280SE saloon. Fortunately, I missed the front of the lorry and hit its rear axle (where it is wider). The car lost its roof, shrunk by a foot and the door next to me was pulled off. I broke my left knee as the dashboard moved back and my left foot as it was caught between the clutch pedal and the sidewall of the car. I had my seatbelt on. Could have been a lot worse.

One of the UK motoring shows ran a test about 6 months ago, where they crashed a 15-year-old Volvo (archetypal "tank" in the mind of the public), with a modern smallish hatch (Citroen IIRC). The cars were collided at 40MPH (combined) impact speed, frontally with 50% of each vehicle (drivers side) hitting the other. Crash-test dummies were placed in the driver's seats.

Result - modern impact-protection worked properly. Volvo dummy had mangled legs and likely severe neck internal internal injuries from the seatbelt action, Citroen dummy walked away due to clever safety construction and airbag.

Obviously if it had been modern 5000lb SUV vs. the same Citroen, we could expect a different outcome - but perceived safety from heavy weight and "tankness" isn't all it appears to be on the surface.

And what about security? One could easily imagine the outcome, if you have an accident with this cart! I would never sit into a such car. Too dangerous.

Too one of these "eggs" across Europe back in '98. Not too bad, topped out at 100mph but would hold it on the way to Venice and got about 45mpg. Italian Alps were a little adventurous due to body lean, but it was almost as fun as a Ducati with all the leaning. Much better than taking the train and about the same amount of cash. Eurorail tickets are expensive when you're crossing countries.

Now if GM will just import the diesel Opel Vectra/Astra, I'd be in the market for a new Chevy. 10X better than anyting they make for the American market. The one I had a few months ago would fly (200kph) and get about 60mpg at the same time. Now those two cars would put Honda and Toyota on their heels. The Malibu and Cobalt aren't even a pathetic imitation. Don't know who designs this crap for GM, but its time they changed careers. Same with the management, its about time they actually displayed some leadership instead of being a bunch of pathetic accountants.

You actually appreciate an automobile as a functioning machine instead of a mobile armored living room. This is considered terribly un-suburban thinking and is discouraged.

Look at the names of some recent SUVs. Armada? Enclave? I wonder about the Escalade (escalate?) and Excursion (incursion?). It's getting to be like George Carlin's monologue about the difference between baseball and football. He also had one about "a place for your stuff", in which we try to drag along an extension of our households wherever we go.

My family and I have always feared that these small cars are unsafe on California highways.

In a collision with several cars going 75 MPH + it would seem to be an issue, especially if a big rig or two is thrown in. People here drive like idiots on the highway, weaving in and out of lanes unnecessarily and speeding because they either late for an appointment, oblivious to the world around them and the physics of traveling at higher speeds or they disregard others' safety because they flat out just don't care.

We call the small cars "Coffin Cars" and the REALLY small ones "Urns".

In an accident just bury the whole mess.

I'd hate to have the jaws of life necessary to get me out of one of those things after an accident.

Interestingly mileage is a function of weight and aerodynamics. You can certainly build a large, light car that is safer than a small, light car and with better mileage than a large, heavy car. The aerodynamics aspect involves the coefficient of drag (cd)and the result drag area (cda). You hear a lot about cd, but it's really the effective drag area that gets pushed through the air. For example, my Scion xD has a reasonably good cd (which is surprising, for a box) but the cda is not that great because it's taller than many other small sedans. My brother's old MR2 actually had a worse cd, but a much better cda.

The solution to a safe highway car is to make it longer (more crush area) and low profile (low cda). In town cars that might more often be T-boned can be wider and a little less long (not as big a chance for a high-speed head-on crash). For both, though WEIGHT it critical. The car company to master cost-effective carbon-fiber should "win", IMHO. Big, comfortable in-town cars (for hauling kids now, maybe just for carpool groups later) weighing half as much as today and powered by a Prius drivetrain and getting the same mileage are certainly possible.

The whole argument about safety versus semi's and full-size trucks is real and reasonable, but backwards. The real question is why have we ever allowed semis on the highways, when less money would have been spent to make a fully capable rail infrastructure (even with no on-grade crossing) without any of the many downsides to highway freight. Without massive new subsidies for highways (which is of course still likely for a while) this problem will eventually resolve itself as freight rates rise.

The pickup truck issue will require regulation at some point, as light trucks are often on the roads (pulling vacation trailers, boats, horses, other cars, etc.) and light short-distance transport as well. Requiring low-impact crush space on the front and back of such vehicles, plus automatic braking systems, would be reasonable.

Of course all this assumes we'll still need cars in 10 years. If the peak/slide occurs quickly, the whole point is moot.

We could also make the cars a little narrower. If Americans have gotten fatter, then it's probably pointless to claim that the back seat of an Accord can hold 3 current adults. If cars were honest 4-seaters, you could get the width down to maybe 60-65 inches while still having some side protection. Maybe a 13% reduction in frontal area. Note that Japanese taxes penalize cars more than 68 inches wide, which is why the Toyota Avalon is built in the US, not Japan, specifically to seat 3 in the back.

To go even further, I have been fooling around with staggered seating, where the driver is about a foot ahead of his front passenger. It appears you could narrow the car to about 50 inches, but I guess you'd also have to lower the car to regain stability.

I think you are missing some basics here. As we seem to be at Peak Oil, the days of cheap gasoline are gone. It's not possible produce good fuel economy in large heavy vehicles with the technology which is known today. That's because the larger vehicles have rather poor aerodynamics and the only way to improve aerodynamics is to make vehicles smaller. As the grotesquely over sized SUV's and big PU's are driven to the scrap yard, the incidence of collisions between small and large vehicles will decline. Also, at 75 MPH, a wreck in ANY car is very likely to kill you if you hit something solid, such as a bridge or a large truck. Those crash tests you mention are performed at 35 mph. You (and the rest of the U.S.) will need to get used to driving smaller, as much as you may not want to, because that's the only foreseeable future.

As I pointed out, I've already gone to an xB (from a Suburban) and a Civic hybrid (from a Jeep Grand Cherokee), so the "going small" thing is past tense for me. I understand perfectly that even this is just a transition, and I'm waiting patiently for an EV. I may pick up a CNG car as another interim option as well. I've happily driven small two-seat convertibles, and would happily drive an EV version of a carbon-fiber Miata clone any day!

I'm not a full-doomer, but I know even this "hope" for some surviving vehicle economy is perhaps extremely optimistic, but that's where I'm at.

My point though, was exactly as you said -- cars need to be "smaller" in weight and frontal drag area. That's where the savings come in. Small for small sake has value in terms of shipping, parking, and road width, but it doesn't really save money.

Long, skinny cars for highways and light cars of any shape for city driving is the need. Light motors, light fuel (batteries), and especially light chassis are needed. It's stupid to push around 5,000lbs of car for 200lbs of driver. 1900lbs of car for 1,000lbs of passengers would help a lot.

And if things get really bad, even that won't be enough.

A lot of marginal users will indeed trade and then junk their pickups and SUVs, but tradesmen will need bigger vehicles and some people will always be able to afford the gas, whatever the price. It is these vehicles I think that need some added protection for "others" rather than for "themselves".

The number of people going like a bat out of hell in the fast lane here in California seems to never drop. It's difficult to watch sometimes. Stomach wrenching. They pass on the right, overtaking cars that are doing 60 to 65 MPH by 10 to 20+ MPH.

I drive 55 to 60 most of the time, adjusting to the situation as required. I do stay away from trucks even in my mid size van.

That's what I believe will cause much of this discussion to morph into something else. In Europe I've driven only in Germany where they drive on the correct side of the road. In a smaller car I felt secure because of the slower speeds and narrower roads. But even at 120KPH on the autobahn I didn't feel at risk. Slower speeds generally but not always equate to less risk and less damage.

At Ford's product development center in Dearborn, Mich., the scene Thursday was described as dramatic by observers. At least one engineer had to be escorted out of the building by security guards, according to one person familiar with the matter, who spoke on the condition of anonymity.

I think they're making it sound more dramatic than it is. With large corporations, they almost always escort you out with security guards. Even if you're leaving voluntarily for a better job, or taking a buyout.

It's standard policy at IBM. My college roommate wasn't a software engineer. She was a mechanical engineer working in Physical Facilities. She took the buyout, and was asked to leave that day. She had to pack up her office stuff under the eyes of guards, and was escorted out.

Of course, everyone knows they do that, so nobody tells the boss they're leaving until the day they actually want to quit.

A number of years ago one of the largest Workers' Compensation Boards in Canada fired all of their investment managers when they outsourced this function to a bank. From what I'm told, the phones lines suddenly went dead and security guards marched in and escorted everyone in this group out of the building single file and into waiting taxis. No one was allowed to touch anything on their desk and personal belongings were later boxed and sent to the owner's place of residence. Everyone was in utter shock and disbelief at the brutal way it was handled (it was as if a bomb had gone off in the building) and the demoralizing effects were felt throughout the entire organization.

Control Data seemed to think of a new and more disturbing way to lay people off every time. And they should have been really expert at it, as they shed all of their 60,000 employees by either selloff or layoff. There was the one where you waited at your desk doing nothing to see if you got escorted out, knowing your project was scrapped anyway. There was the one where you attended a meeting with an "angel of death" and an "angel of life", each handing out envelopes that had either your termination letter or an offer to continue. There was the one where the building was locked up with chains around the door, and you were bussed to a theater and told of its closing. And of course, there was the out-of-the-blue layoff where you had no idea it was coming, and the security folks showed up at your office with a box for your personal stuff, and they never let you out of their sight until you were out of the building. This last one seemed to be the most popular method.

When big corporations are in trouble, your personal dignity is not a high priority.

I've seen the two-room, two-angel method too. One guy's BS detector went off so he decided to skip yet another "mandatory" meeting, and ended up working all day by accident though he was supposed to be layed off at 9 a.m.

Bell Canada's method was to encourage people to work from home - first they would eliminate their office space because it wasn't needed; then they would cancel their computer access along with their employment.

Nortel Networks would invite people to a departmental meeting in the auditorium where they would all be fired together - got to be known as the "slaughter-torium".

THE Accident Group, Britain’s biggest personal injury claims company, sacked nearly 2,500 staff yesterday, many of them by text message, some by e-mail. Salaries for the past month were also cancelled.

The entire electrical grid in the US goes back to before 1900. It has grown layer, upon non-standardized layer for all this time. Much is decrepit. Current solar and wind installations are off-line obligatorily, when the capacitance of the grid is not capable of absorbing the energy generated now...the absorption rates are INEFFICIENT, and determined by local conditions at the entry point.

The system, to absorb the 20% of national energy requirements envisioned by Pickens and alluded to by Gore requires a TOTAL restructuring and renewal of the ENTIRE ELECTRICAL GRID."

While the size and cost of the transmission superhighway may sound large at first glance, it is important to keep these numbers in perspective. Given that electricity transmission infrastructure typically remains in service for 50 years or more, the cost of the investment for the average household would be equivalent to about US $0.35 per month, less than the cost of a postage stamp. Those costs would be more than made up by the economic savings from replacing natural gas use with wind power generation, not to mention the benefits of reducing emissions of carbon dioxide (CO2) and other pollutants.

There is no longer a need to specifically design cars for the American market.

There are continuing differences in regulatory requirements in terms of crash-worthiness, lighting, etc. A good policy move for governments of auto-manufacturing countries would be to harmonize standards so that companies could truly sell any car in any market. Markets that are willing to compromise safety for savings would get the same car without airbags, ABS, etc.--easy enough as these are just "lighter" configurations of the same car on the assembly line.

Such harmonization is long overdue--it would probably increase buyers' options in any one market as well as reduce manufacturers' costs (which they could pass on to consumers or add to profit).

IIRC, Ford was talking about doing this "world car" thing over 20 years ago. Glad to see that their reality may finally be catching up to their old advertising. I guess this means that we should expect to see some real quality improvements any day now? (Remember "Quality is Job 1"?)

But really, who didn't see the SUV's collapse coming a mile away? Who didn't note the beginning of the end when, a mere five years ago, the world's worst consumer vehicle ever took its place as the king of obscene stupidity, the poster child for all that went wrong with the condescending American ethos, the oil-sucking war-drunk Bush-mauled mind-set?"

I'm waiting for the return of the Ford Pinto. It never achieved "classic" status so we never see them around, even at antique / classic car shows. I used to drive one with hatchback, put extra-large wheels on the back so it was like an overdrive, drafted trucks between Boston and South Bend for 40+ mpg. Not such a big deal now but it was fun to drive. Ignore the rumors about Pintos exploding when rear-ended!

OMG...I had a Pinto when I was 18. I used to call it the Weber Grill on wheels. It had a sunroof and the hatchback. My girlfriend at the time would take it to the country and go "roofing" (she would ride sitting out the sunroof while I drove.

Average Monthly Oil Price in July (about $133) Plunged by About One Dollar From June ($134)

IMO, average monthly prices give us a better idea of what is going on in the oil markets. For example, most producers in the US are paid for their oil once per month, based largely on the average posted price for the preceding month.

From May, 2007 to May, 2008, oil prices (WTI spot) increased at an average rate of about 6% per month, from $63 in May, 2007 to $125 in May, 2008. There were two monthly declines, both in 2007. For example, August, 2007 fell about 4% below trend, followed by a three month annualized rate of increase of over 100%/year.

June, 2008 was about 1.1% over trend. July, 2008 was about 5% below trend.

I think that the dominant factor in world oil markets is the tug of war between declining net oil exports and the declining demand for imported oil, as low bidders are forced to reduce their consumption. There are of course a lot of monthly changes in supply & demand, but IMO, the trend is pretty clear.

We've had some fun data in the past week. As I said to a friend, learning that we Americans have reduced our demand by 900 kb/d in the past year presented us with a wonderful test case. Because China plugged along with their 300 kb/d increase, and Rubin's slice of the numbers shows 700 kb/d less in exports from OPEC. It's not often the picture is painted so clearly. So yes, the trend is pretty clear.

Also, because this is all unfolding with a three year production tail that's flat, it means that a lagging wave of supply is not arriving. And will not arrive. So that's also interesting to ponder. If I am correct about that, then its just another way of realizing that there may be no false price signal this time.

When I began to think about the demand destruction/suppression moment years ago, I thought it could potentially create a false price signal (lower prices) that would then create it's own little volatility problem. But I wonder that this moment occurred in January of 2007.

Now that we've arrived in July/August of 2008, the tail of 3+ years of no production growth that we are dragging behind us has a powerful effect. I see little price relief and I would characterize the drop from 147 to 125 as minor. But your monthly price tracking I think reveals the truth even more fully.

What $147 did is set a new OPEC floor. $200 will set a new floor, onward and upward. By definition (OPEC's definition) a fall to $100 means there is a glut of oil globally (never mind that $100 a year ago would have meant there was a shortage).

"In a revolutionary leap that could transform solar power from a marginal, boutique alternative into a mainstream energy source, MIT researchers have overcome a major barrier to large-scale solar power: storing energy for use when the sun doesn't shine."

I have often wondered about the possibility of replicating photosynthesis for capturing energy. The concept of what they are doing isn't new - using excess solar to produce hydrogen that can then be used off-peak, but the approach is. I have written about this before, but from the perspective of using the excess solar for electrolysis. They are using it for catalysis.

Do you think that artificial photosynthesis can possibly be any more efficient than the natural version?

Theoretically, sure. Evolution is very good at rigging together a design, but there are usually inefficiencies in the design. For instance, your body wastes energy producing broken proteins and such. So it should be possible to design an artificial photosynthesis system that can outperform nature.

However, theory and reality may be far apart. In theory, one should be able to engineer bananas that thrive in Alaska. But don't look for it tomorrow.

"There is much work to be done in converting Nocera's idea into a commercial product. At the moment, his catalyst can only accept small amounts of electrical current at once, meaning that it would be an inefficient way to quickly store large amounts of energy. But Nocera is certain that engineers will iron out the issues and produce commercial-scale products within a decade."

So it looks as though some important scientific work has been done, but there is a lot of engineering to be done before (if ever) this can be made practical.

thanks--Interesting that Matt asserted that there is no evidence that the Saudis are producing 9.5 mbpd, let alone 9.7 mbpd. My oil trading source confirms that he has heard the same thing. Also--India is reportedly sending out tenders for oil, with reportedly no response yet from OPEC producers.

Producers, unfortunately, have not made the investments necessary to keep pace with this growing demand. Because production capacity and investment has been curtailed over the last decade, supply now barely offsets declining production in older fields, let alone meets new demand.

A very interesting quote coming from the Treasury Secretary and appearing on the Treasury website.

Now-- if the Secretary of the Treasury says things like that, as well as promoting monetization of massive banking sector debt, financed by the Treasury, which no longer has enough taxing power to actually pull it off -- and the real engine for allowing all this debt growth, the promise of infinite increase in oil supply has been shown to be finite....

Sure -- the "working class" has all but been gutted, and the "middle class" won't be able to pay the required taxes, as they too, are on the way out. It's Cellular peptide cake for all, and Après moi le déluge

I have a question that may be impossible to answer: Does the Treasury have access to the people/information that are involved in the IEA report that is coming out this November?

I'm worried that the IEA report is going to be one hell of a dozy. I base this on the fact that recent IEA statements have been pretty ominous, and now the federal government is getting all gloomy on us. This IEA report is the one that was supposed to come out this june(?), but someone here once mentioned that they had it on good authority that it was put off at the urging of the US because of elections. This, to me at least, makes the warnings of the IEA very worrisome because they seem to be trying to prepare us for bad news without showing us their hand. When people try to hint at something without telling you what that something is, they usually use a bunch of understatements (eg. you probably don't want to drink that, that doesn't seem like a good idea, etc.). If these are the understatements meant to let us down easily or let politicians say "I told you so", then i reckon we're screwed.

I have no special access to priviledged information, but this has been my conclusion for a long time. This is why I see PV as being so valuable, and well worth the mere $5/watt that it sells for retail. If we really hit an electricity shortage or grid failure, that price (and the resale price of even 'pre-owned' panels) will explode, IMO. Availability will also plummet.

Hedge your bets and get a few watts worth. (Just not those silly Yard/Path lights.. what a waste of good PV!) I'm also getting materials together for Wind and Solar Heat/CSP-lite.. but these are compound processes with moving parts, liquids and heat to manage, and more precise and expensive mounting requirements. With a one-inch thin piece of panel and some sunlight, you have power. It's as simple as that. Twist the two wires onto a '12v Cigarette Lighter Plug and you can be charging your phone, laptop, radio, car battery or flashlight with no fuss. You don't even HAVE TO use a charge controller for smallish panels (15-30 watts).. in a pinch you can just clothespin the wires to the lugs.

There should also be a bonus for the relatively steady price of solar electricity. Doesn't the volatility of current energy markets impose a burden on business? All that hedging and pre-buying and still sometimes you get wiped out.

Regardless of the viability - or timeliness - of the electrolysis discovery above, PV is still a good idea now for various reasons.

But, Super390, The biggest volatility issue right now, perhaps, is that congress hasn't renewed the tax credits for business solar electricity. Business will not, in my limited experience, plan on investing big bucks if they don't know whether or not they get a 30% tax credit (expires at end of '08).

The day to day reality is that with decent financing (yes, a bit harder these days...) solar PV is cash-flow positive from day one (in many typical situations). In other words: Utility cost savings + tax write-off savings (home equity financing) > are greater than > annual payments for your system. At the end of your payment period, you still have your asset (solar system) and free electricity (avoiding MUCH higher future rates).

The PV is only "worth it" if you can make good use of the power. I see three ways to do it:

(1) not connected to the grid - requires batteries, which are expensive, finicky and short-lived.

(2) connected to the grid, making your meter run backwards. This works well in some places, where the utility buys your power at peak rates (CA?). Not so good where they pay an average rate and, if you generate more than you use, take away your credit at the end of the year (VT). Also, requires expensive electronics to connect to the grid.

(3) use for auxillary purposes such as charging small batteries. Not really financially worthwhile except as back-up power for blackouts - which may be more common in the future. For small flashlights etc a better way is to have several sets of batteries on hand, kept charged from the grid. But with PV, larger batteries and an inverter can run bigger items such as a freezer.

Lacking a good use for the power, one can still see the PV panels themselves as a resalable investment. Perhaps.

Given the poor state of the grid in India, many middle class households have their own battery and inverter for minimal power during power cuts. Using PV to charge those batteries would make a lot of sense.

As I have posted here on a number of occasions recently, the petroleum products distribution system in India is also under severe strain. Diesel for generator sets is often unavailable. Indian are nothing if not practical. I expect to see a strong increase in PV sales in India in the coming years.

The most efficient use is direct, of course, and many panels are employed to run waterpumps, and to run fans that aid with either heating or cooling. These latter have the advantage of not requiring any control electronics, since they run in proportion to the amount of Sunlight that you are either A)using as a heat source or B)using the fan to relieve you from it..

Batteries are the high-maintenance end of the system,sure, but they are out there working all over the place. It's possible to take very good care of them, and I've even gotten decent lifespans from cells that I mistreated badly. Also, you have basically an open ability to scale this as you find needs.. you can be charging your laptop batteries.. not quite large or small, or you can put a little 6volt panel on your PDA as I have, and just have the convenience of not having to chase down that wall wort every couple weeks. The gain is not from grid-watts saved as much as from having this little datasource always powered up and powerable, as long as you have a window and a sunny day. (Heat Shields are helpful and not at all hard to incorporate.

The great thing is that these will be working for you 'before' any blackouts, just taking down your grid-dependence as much as you've set them up to.. and then also serve as your Emergency Supply, AND your Portable Supply.

You've been on like a debunking mission lately. But thanks for the challenge.

You don't even need a particularly large PV array to run the fridges/freezers. Get rid of the upright/s and buy some chest fridges/freezers. These maintain their temperature much better than uprights (cold doesn't spill out every time you open the door. You coulkd run them off the PV during the day and cool them down. Not a problem at night, as you're probably asleep and won't be opening them up anyway. :)

I'm not sure where tyou get the idea that batteries are expensive, finnicky, and short-lived. You're powering a house, so the latest, greatest, and lightest batteries aren't a high priority. 500kg of regular old Lead-Acid batteries with Rudman Regulators will be enough to run a household overnight, and last for years (and can be recycled at EOL).

Wheat had three levels of nitrogen vs. yield discussed in the table, 40, 75 and 110 lbs/acre.

Corn had potential yields for nitrogen from 80 to 220 lbs/acre.

The range of nitrogen for wheat discussed was exactly half the nitrogen for corn discussed !

Dryland cotton is the LEAST water intensive crop. A major crop in Egypt where muscle power was used to irrigate until 50 years ago (wheat was often grown closer to the Nile, cotton on higher ground). West Texas makes a cotton crop, without irrigation, on 12 to 15 inches/year (from memory).

Alan, I am currently 2/3rds of the way through Big Cotton. It is incredibly interesting, and the thought struck me as well that cotton has a lot of potential for making a major comeback as oil depletes.

Yeah, I almost mentioned that. In fact, I was thinking about it when I was reading the book, when they described the problems they had early on with the oil gumming everything up.

Cottonseed oil is a good biofuel. It is also edible, and we know that can present issues. But in this case, it is a byproduct of cotton production, and somewhat removed from the food versus fuel debate. Not entirely, but better than using cropland solely for biofuels.

The downside is the yield is not great. It is only 30 gallons per acre or so, somewhat less than soybean oil.

The downside is the yield is not great. It is only 30 gallons per acre or so, somewhat less than soybean oil.

Yes but from crushed soybeans you get soybean oil and soybean meal and nothing else. From cotton you get the cotton fiber, the cotton seed oil and the cotton seed meal. And the cotton fiber is by far the most valuable of the three. So unlike soybeans, the cotton seed oil is a byproduct not the primary product. Also cows just love cotton seed meal, the other byproduct.

Cottonseed oil is considered one of the less desirable cooking/edible oils (olive, peanut & avocado oils among the best for slightly different reasons). Soap is another competing future use for edible oils.

Cottonseed oil is a desirable secondary product, as is cottonseed meal for animal feeding.

One of the reasons why people who care about human health warn other people off of cottonseed oil is because cotton fields are carpet bombed with chemicals, including stuff that wouldn't be used on crops intended for human consumption. Thus my interest in cottonseed as a biodiesel feedstock - we're not depriving the human food pipeline of anything that needs to be there in the first place.

I always check ingredient lists, and that is one of the things I avoid.

Even organic cottonseed oil contains large amounts of a toxic chemical called gossypol which is produced by the plant. In fact its toxic enough that cottonseed oil is sometimes used as an insecticide. Also, since consumption of unrefined cottonseed oil causes sterility in humans, gossypol has been looked at as a potential male contraceptive. Unfortunately, gossypol also messes up your electrolyte balance and can cause kidney failure. If the gossypol is extracted from the cottonseed oil then the resulting product is an excellent frying oil. Of course, with biodiesel, you could probably skip removing the toxin since you're burning it anyway.

West Texas makes a cotton crop, without irrigation, on 12 to 15 inches/year (from memory).

In North Alabama we get over 56 inches of rainfall a year and the cotton crop was really bad when we did not get good rainfall in the spring. However the soil of that area probably required more rainfall than West Texas for cotton but I think 15 inchew would require a lot of irrigation to grow cotton.

The demise of the Aral sea was caused by Russia diverting the rivers that fed the sea for cotton irrigation. Basically the more rainfall or irrigated water you have, the better your cotton crop will be. Cotton needs water and the more water on the cotton the better the crop.

Nearly 5 million acres of cotton are grown annually in the world's largest cotton patch, West Texas, where average rainfall ranges from a respectable 26 inches on the east side of the Rolling Plains to 16 inches on the west side of the High Plains....

Where irrigation water is available, Krieg said continuous cotton, grown with modern, highly efficient water application systems uses the limited resource with the greatest efficiency. It is the most profitable production system available, he said.

Growing dryland cotton (I am not an expert) requires rotation. Grow a crop, good or bad, and let the land lie fallow (perhaps light grazing) till a "wet year" comes and leaves residual soil moisture. A wet winter is best. And then plant and pray for some rain.

Dollars to donuts, it's only resistant to pests because it's not grown much.

IME, this what people miss when it comes to agriculture. Everything we grow was once a weed that grew without pesticides, herbicides, or fertilizers. The reason our crops now require these chemicals is because we grow them in monoculture. We create a heaven for certain kinds of pests, so naturally they run amok.

Very true. You can grow corn in your backyard in, say, Maryland, and don't need chemicals. In Kansas, your backyard corn will probably be eaten alive, because you're surrounded by acres of corn fields.

Crop rotation also helps.

However, hemp or algae or whatever grown in small amounts mixed with other crops is not going to be an answer to peak oil. It's already borderline at best when it comes to EROEI. It will only get worse if you have sort it from other crops, travel long distances to harvest it, etc.

Boy it would be a shame if some of these people lost a finger or a few toes stealing those things....we've had people here in Orlando rip water meters out of the ground using pickup trucks. And those are bronze, I don't know if people think they are copper b/c of the color or what...

I work for an engineering company and we had contractors tell us they would not work with copper on the water service to the building because they couldn't warranty it, they knew someone would steal it before they turned the project over to the owner.

True, but I didn't think you would get full price for an alloy like that...but I could be wrong. Maybe they are trying to rip out the piping as well. Unfortunatly it wastes a whole hell of a lot of water because then the nearest valve (curb stop) is gone and you've got to find the nearest valves on the main.

The local news reported on people that make a living picking up scrap metal off the side of the road in old SUV's and pickups. There is apparently a line of people at the dealer every morning, even people wheeling it there in shopping carts and carrying in their hands. One guy let in on his secret-carrying around a magnet. That way he can find aluminum easy.

Smear some tar on the copper (roofing "cement", etc.). This dramatically lowers the value of the copper at the scrap yard, and makes the copper harder to handle and cut and makes the thief messy (soap and water is not enough to remove all residue).

The theft of metal is worldwide. Lampposts, park benches, wiring, statues, grave ornaments, fencing, cars etc.
In Melbourne (Australia) a heap of benches were taken from bus shelters and I've read of railway tracks being taken. So transitioning to public transport will be harder when the infrastructure is screwed with.

Pastor Lindsey Williams is back on Jeff Rense Show... and now he's predicting that oil would fall to 50$ per barrel, coz the Powers-that-be are going to open up 2 Super-Giant Oil-fields, one in Indonesia and the other on the North Slope of Russia. This would in-turn bankrupt the Arab World, and they would be forced to dump all the American GreenBacks in their possession, and that would cause the US Dollar to collapse...

Basically, Mr. Williams was told that over the next twelve months, from mid-2008 to mid-2009,

1) news of super giant oil fields, ready to produce, would be announced for two locations, in the Northern Slopes of Russia and in Indonesia, which oil fields would together contain more oil reserves than the entire Middle East;
(2) that this news would drive oil prices down to $50/barrel;
(3) that OPEC countries, especially in the Middle East, would be bankrupted by this price decrease;
(4) that this would cause the financing of our foreign trade and current account deficits through purchases of treasury paper by foreign nations with their surplus oil profits to collapse, leading to the collapse of the dollar;
(5) that the collapse of the dollar would cause unprecedented financial strife and turmoil in the US, and that it would take many years for the US to recover from this financial debacle;
(6) that they (big oil) support John McCain for President; and
(7) that US domestic oil reserves would never be tapped, and that any legislation which might allow domestic reserves to be tapped would not be allowed to pass, leaving the US dependent on foreign oil forever.

Lindsay Williams has already discovered several giant fields in Alaska - enough oil to last for hundreds of years.

"The following is a comparison between the three oil fields on the North Slope of Alaska which have been drilled into with numerous wells, tested, and proven. Prudhoe Bay can produce two (2) million barrels of oil every 24 hours for 20 to 40 years at artesian pressure. Imagine what the production of the Kuparuk and Gull Island fields could be.

Prudhoe 600 Ft. of pay zone 100 square miles
Kuparuk 300 Ft. of pay zone Twice the size of Prudhoe
Gull Island 1,200 Ft. of pay zone At least four times the size of Prudhoe . . . Estimates are that it is the richest oil field on the face of the earth."

Lindsey was on Alex Jones stating that he and his family were threatened because of all he was making public about the NWO (New World Order)... but then he supposedly called back the Illuminati oil man up on the North Slope and the guy revealed this info to him. Alex's other guest didn't buy Lindsey's claims.

Oil can go to $50, but if it does that will mean worldwide depression has hit. As far as big oil supporting McCain, I think you can take that to the bank (if there isn't a run on it this week). Obama announced he is supporting a windfall profits tax on the oil companies so he can give every American $1000. If he keeps talking like that.. big oil will make sure he's the next JFK.

Peak oil proponents and fellow cultists in the climate change camp must be scratching their heads over the recent dip in crude oil prices. If oil production has peaked, its decline irreversible, and global demand continues to rise, why would prices drop?

On the basis of peak oil theory, investing in oil futures should be a no-brainer: Go long until the world ends.

These are the types of rhetorical strategies that greatly discredit the detractors of Peak Oil. The ploy here is to set up a fictitious straw man, and then knock him over.

The problem with this strategy is that it is dishonest. (And it also tends to piss people off, having their positions distorted and mis-stated.)

My question to those who employ this sort of sophistry to argue against Peak Oil is this: If your underlying supposition is sound, then why do you have to resort to these dishonest tactics in its defense?

One of the first things I learned when becoming PO aware is that the plateau would feature great volatility in oilprices. So no, I'm not perplexed nor scratching my head. And I don't think anyone else is.
The person who wrote this has nu clue. At all.

Right PO isn't about oil prices - it's about oil supply. And there isn't anyone out there asserting that the recent drop in oil price is due to a growth in oil supply. I doubt there is any evidence to support that position. There is evidence of drop in demand - both seasonal and due to the high price.

Therefore, the basic assertion of PO, that supply is peaking, is not changed by the oil price changes.

The ironic thing is that when the price went parabolic there was 100% agreement, on TOD and everywhere else, that there was going to be a major price correction at some point-the term "bubble" was thrown about freely. So the price corrects, and all of a sudden it is supposedly unexpected.

I wouldn't say the drop was an indicator that there was a bubble. We have demand destruction in both the US and China, possibly some other areas too. Prices just jumped $3 or $4 when Israel made another dumb threat against Iraq. Plus there was the news about Cheney looking at ways to use special forces to stage a fake Iranian attack against our ships in the Strait of Hormuz (IIRC). There are many things that can make the prices go right back up.

Maybe we'll get a reprieve until September or November.. we'll see. That hissing sound is the US economy sinking... retailers are going to get screwed this Thanksgiving and Christmas season.

I think oil prices are mostly supply and demand PLUS the additional "above ground" factors that add on to the price. The Dutch assessment put the price floor at $110 per barrel, right? which is an extraordinary number. So $147 could signal a peak, but then it drops and therefore there is no signal of a peak?

Prices are easy to track and understand, but I think the real signal of PO is the production numbers that get posted on TOD every quarter or so.

IMO, geologically speaking, peak oil is a certainty. The real question is not if there is peak oil, it's when is peak oil. Peak oil in one hundred years, no problem. Peak oil now or in 2005, that's a problem.

In any case, this little blip the past few weeks is nothing, as westexas pointed out, the average price for July is only a dollar short of June. If these guys had been told the price of oil would be $122 pb three years ago, they probably would have dismissed you. Now they're claiming $122 pb is low and evidence that peak oil doesn't exist? They're deranged. I hope their Hummer rots out its fuel lines with too much ethanol.

The author gives the game away in his opening line. The sloppy lumping together of 'Peak Oil Proponents' and 'Climate Change Cultists' screams 'I'm pushing an agenda!'.

And sure enough...

Untapped unconventional resources in the U.S. are believed to hold a potential yield of seven million barrels a day by 2035, with much of it protected at the environmental lobby's behest, while the U.S. Geological Survey estimates that 412 billion barrels of oil are lying in wait around the Arctic Circle, where Greenpeace will no doubt be lurking should anyone dare exploit it.

Yep. It's those damned, world-controlling environmentalists, at it again.

I don't know whether to laugh or cry when I read articles like this, particularly when the writer accepts central tenets of PO theory, such as remaining reserves being harder and costlier to extract:

On the bright side, in-place resources of bitumen, oilsands and oil shale could yield roughly 10 trillion barrels or equivalent, most of it in friendly hands. However, it will be expensive to extract and process.

It's as though most of the pieces of the puzzle are there but they just can't put them together to get a coherent picture.

...the price of oil began to weaken as the global economy wound down and demand lessened. That's the way markets are supposed to work.

So there's no need to worry: there's a market solution. The global economy will just wind itself down and everything will be fine. ;)

I see armies of strawmen. Usually whenever they announce some new find somewhere or another, people start to talk about how "peak oil must be wrong".

Recently there was a fellow who works as a roughneck (not sure where). I tried to explain it to him, and he would just come back and say I was full of crap. He knew that where he was working, they were drilling and finding oil (80-250 bbl/day/hole), and thus in his mind this is all bunk. I couldn't see the forest through the trees...

You've highlighted a running battle I've had with a few folks here. The statement that OIL IS GETTING HARDER TO FIND is commonly thrown around. And with almost the same breath some say we just have to get better at finding it. I've been a petroleum geologist for 33 years and it's never been as easy to find oil/gas as it is now. I'll spare you and the thread the mind numbing details. The problem is that there are a lot fewer fields left to discover…especially very big ones. There are a few areas of big potential that have been off limits for one reason or another but they are an exception to the rule. About 30 years ago if you had a 25% success rate you’d get a bonus and a raise. Now such a success rate would get you run off. Not only is it relatively easy to wildcat now than 30 years ago, we can also target much smaller reserves. Another fact that’s difficult for many to understand is that the latest high oil/gas prices aren’t going to increase the drilling effort significantly. Drilling costs have now gone up almost as fast as the price of oil/gas. But don’t misinterpret that statement: oil/gas exploration was very profitable at $60 oil. That hand sees many of his wells drilled successfully. Since he's only seeing a tiny piece of the process he can't grasp the volumetrics. Though he’s been working on many good wells he has no idea how little oil/gas is being found compared to the good ole days.

I told the guy that some of the Saudi wells were briefly producing something like 18,000 bbl/day (I found a reference on the web for that, but apparently there were other wells that were even higher). Of course he didn't believe me. Anyone who was around when those wells in KSA were first drilled is long retired by now, and this is so far from anything he had seen that it just seemed inconceivable.

One of the recent specials on TV (I think the Australian one that ran on the History Channel) had an interview with one of the last guys left who was on the team that found Ghawar. He said that those were heady days. The guy was in his 90's I think...

The statement that OIL IS GETTING HARDER TO FIND is commonly thrown around.

You are, again, misrepresenting what people are saying. And what people say is not always what they mean to say, so you have to be a little charitable and look at the context. Of course, if you have vastly better technology than before the actual act of finding something will be easier. But this is not what most people are talking about. What they really mean is there are fewer and fewer fields to be found and it's getting really hard to find sizable oil fields. I.e., they are really talking about the volume of oil being found, not the number of fields.

Along with this are the follow-on assumptions about extracting it, getting it to market, it's ERO(E)I, etc.

I suppose what you are shooting for is clarity (Not unlike me repeating my call for a calculation of BOEU - barrels of oil equivalent utility), so, you can keep repeating this misrepresentation if you wish, but it is a misrepresentation in most cases.

This is what I've feared about the bumpy plateau even when it was just a theory still "a few years out". Well the bumpy plateau has come. These spikes and dips are causing the media and politicians to do a head fake every time things seem to be getting better. Only pessimists like myself can fully appreciate the idiocy... I say we tar and feather the news pundits first, then perhaps the trial lawyers second... followed perhaps by the neocons, big oil execs, and worthless politicians.

Hi, all. I have a short public service announcement for a project I'm project managing.

San Francisco Peak Oil Town Hall Meetings

The San Francisco Peak Oil Preparedness Task Force is committed to educating the people of San Francisco about oil depletion and how they can prepare.

We have teamed up with students from the Presidio School of Management (home of a well-regarded sustainability MBA) to host a series of six town hall meetings this August on preparing for peak oil.

The town hall meetings are open to anyone but have been designed specially for the people of San Francisco.

The meetings will take place entirely online.

You will need a computer connected to the Internet and a telephone that can call a conference call service (long distance will apply but is otherwise free). For inexpensive long distance calls, consider www.skype.com, www.jajah.com or www.gizmoproject.com.

Here are the topics:
* August 4 — What's Happening With Oil?
* August 6 — Growing Food in an Urban Environment
* August 11 — Creating Communities and Local Economies
* August 13 —Transportation in a Post Peak World
* August 19 — (Please note the date change) Personal Preparation for Peak Oil
* August 20 — Keeping Healthy in a Post Peak World

There are two presentations each day, which are identical to each other. Choose the one that works best for your schedule:
* 12 noon until 1pm (Pacific)
* 7 pm until 8pm (Pacific)

These presentations are designed to help answer the question, "Where do I start to prepare for peak oil?" Each meeting incudes about 20 minutes of content followed by 30 minutes of Q&A.

In San Antonio, Peak Oil is never mentioned. I'm not exaggerating, I mean NEVER. Not in the news media, not by politicians, not by citizens...nobody. The idea of a "peak oil task force" would be completely unheard of. It's like it doesn't exist. Very disorienting to live in a place like this, with the knowledge, and realize just how much in denial the entire community is. Also, kinda scary.

Rest assured, even with a peak oil resolution and a peak oil task force and more peak oil people per capita, perhaps, than any other similar sized urban area, or at least close to it (though in the scale of things like this: the percentage is still so low 'scale matters') - plenty of people in the SF Bay Area have never heard of peak oil, have no clue, and it's still unclear how any individual city might extricate itself from BAU anyway,.... so don't feel too much despair.

Here's an article I spotted on the BBC website which may be of interest to TOD readers. The author is attempting to live for 1 month without using that ubiquitous oil-derived product, plastic. The concept's a bit gimmicky but there's some interesting tidbits in the article. The pictures showing a month's worth of plastic waste are particularly eye-opening.

It says in the article that she has an 'other half' by which I presume she means spouse/partner. It's the waste for a family not a single person. Either that or she has serious dental hygene issues and/or a very powerful grip.

how about a month without any oil derived products? not counting food unless someone has a very remote farm to donate for the experiment.
that means of course no plastic.
all non natural rubber.
no cosmetics.
no pharmaceuticals.
no non-natural fiber clothing.
no books, newspapers, etc that are not printed with natural inks.
thats all i can think of, off the top of my head. i am sure there are more products in which oil is a feed stock for raw material.

Not bad, but don't you think it needs a live feed of current crude price on the top, along with todays change?
This gives relevance to the recent stories. I just hope it comes off better than the related news on Bloomberg.com!

Definitely - have not had time to find a reasonably priced (/free) source for crude price yet (and would not like to use direct embeds from 3rd parties, like eg oil-price.net - althought that might well do as a preliminary solution)

I stopped using Firefox and went back to Explorer and the rating system does not currently work with Explorer either. However that was not the reason I stopped using Firefox. With Firefox I was plagued with "scripts" running and locking up my system. I would have to reboot every few hours to get rid of them. That has not happened once since I went back to Explorer.

There was another reason I went back to Explorer, with Explorer I can copy and paste from most data files directly from HTML into an Excel spreadsheet and have every data point go into different cells just like the data in the HTML file. With Firefox everything goes into the same single cell.

There are several features Firefox has that I miss however. Misspelled words are underlined by Firefox but not in Explorer. And the search feature is better in Firefox, it remains when the page is refreshed, in Explorer it does not.

There are also extensions that let you copy multiple items to your clipboard, and copy images to your clipboard (though that's already built-in in the new version of Firefox).

My favorite extension is probably BBCodeXtra. It adds a flyout menu when you right-click in a text box that lets you easily do HTML or BBCode coding to do things like post links, images, quoting, and formatting.

Interesting thing happened on my PC last night all at the same time. TOD, Mortgage Implode-O-Meter, and The Automatic Earth are all giving me the same error message when I try to access them on IE. The message is "IE cannot open the Internet site xxxxx.xxxx.com. Operation aborted".

I switched to Firefox and they load just fine. Do you know what's going on with IE?

"As outrageous as the idea of a production 1L/100km (235mpg) car sounds, more reports have emerged confirming the ultra-frugal car is in fact in development and that it could be on the market by as early as 2010. At last year’s Frankfurt Motor Show senior VW exec Ferdinand Piëch claimed the car would be available by the end of the decade and a month later, CEO Martin Winterkorn backed up the claim as well as providing some of the production details. The latest reports indicate the car might not be a single-cylinder petrol design like the concept, but a two-cylinder diesel-electric mild hybrid.

...

Pricing is expected to fall somewhere between €20,000 and €30,000 ($31,400 to $47,100). Assembly is tipped to take place in VW’s prototype shop, which can produce 1,000 cars per year at full tilt, reports CAR."

``We haven't seen demand destruction in the sense of demand being reduced that won't then expand again at a lower price,'' Barclays' analyst Kevin Norrish said in a phone interview today from London. ``Because of the underperformance of non-OPEC supply versus expectations and the health of non-OECD demand, prices below $120 aren't justified.''

Looks like Barclays has decided that the floor is now $120/barrel. Note that "supply falters" part.

Demand for crude oil in the U.S. housing construction sector will not rebound if the price drops to $120 / barrel. Tight credit will keep that sector suppressed. Maybe China's demand for crude oil will decline after the Olympics. Demand may return in the form of people filling their half empty fuel tanks or going on a road trip.

Given enough cheap energy, we can manufacture or find substitutes for just about anything. Desalination plants, pipelines, and pumps could solve the water problem, along with conservation. (Do we really need swimming pools and green lawns in the desert?)

But when energy is the item that's scarce, it's a whole different ball game.

That article from Ha'aretz I posted this morning just boggles my mind. I don't see peak oil as being good for Israel. Quite the opposite, in fact. But apparently, at least some Israelis are looking forward to it, because they think it will de-fang the oil-rich Arab states.

Apparently another case of mistaking "peak oil" with "the end of oil". Meanwhile, the oil-exporting Arab states are getting ever richer (for now), while oil-importers such as Israel are suffering. That article boasts that Israel holds the key to a prospering non-oil economy, while in reality they've built it on the basis of cheap oil.

This may not be a surprise, but Obama has just released a proposal to fund a new round of tax rebates with a windfall profits tax. It's pandering at its worst, but what really bugs me is that I have never been able to find the details... what is the price point, and what is the new tax rate? A 99% tax on everything over $50 has much different ramifications than a 10% tax on everything over $100. Whatever the details are, I think the likelyhood of an Obama victory, and windfall profits taxes are what is keeping E&P stocks down with P/E's of 6-7. Personally, I am thinkng about reducing my oil stock holdings shortly because a windfall profits tax would eliminate their effectiveness as a hedge against high energy prices.

Capturing as much revenue as possible from Big Oil is a necessity. I would rather that $ go to infrastructure than rebates - but it could help. I don't think oil prices are the main culprit behind the problems in the financial sector, but rather the housing bubble. A functioning financial system is a necessity if we are going to be able to deploy the capital required to mitigate peak oil. If economic stimuli stabilize the finacial sector and the government passes new regulations to prevent future problems, then the oil co. tax and consumer rebate could be good policy - not just for political purposes.

Coming from Alan Binder, a dem economic advisor, Cash for Clunkers is an old vehicle buy-back program. Proposed cost: about $20 billion, which is fairly modest compared to this year's $170B program. Binder positions this as a pollution reduction strategy and economic stimulator; I think if it removed low-MPG vehicles from the fleet, it could reduce consumption (Jevon's paradox notwithstanding).

Re: windfall tax; the oil majors have got themselves in a corner this time. Record profits...show me that they REALLY are trying to come up with viable long-term, sustainable energy strategies and maybe I'd be more sympathetic, but these corporations appear to be laughing all the way to the bank and frankly, I would enjoy seeing them doubled over and clutching their groin for a while.

Thanks Leanan, I searched on "junkers" and should have searched "clunkers".
The discussion glossed over the merits of the proposal; I am not a big fan of just giving people money so that they can give it to energy companies- this doesn't do anything to address the underlying dilemmas. I am much more in favor of targeted rebates for home energy efficiency and the "clunkers" retirement plan as they seem more likely to help us reduce our energy consumption.

In addition to getting rid of polluting vehicles, retiring "clunkers" would likely get some of the less safe vehicles off the road, which is also a pro-equity argument.

I wonder if we went back to the high corporate tax rates of the 1950s and 1960s, would we be getting as much money from Big Oil as any current windfall tax scheme without the accusations of discrimination?

Or we could just skip the whole misguided windfall tax scheme, and reduce corp and personal taxes, and spend fewer governmental dollars.

Maybe if we'd had high corp tax rates all the way through, Big Oil would have gone bankrupt in the 80's and we'd have to find another favorite whipping boy now. Why does ANYBODY think Big Oil "owes them"? If somebody wants some of the profits, they can buy some stock. If they want to deny them their profits, they shouldn't buy the products. Personally, I think Exxon is a cuddly teddy bear compared to OPEC, and they will be our best and only friend as we end up scraping the bottom of the barrel for oil dregs to fund whatever comes next, since we don't have much in the way of national oil companies.

This whole notion of "let's go get somebody's money" seems like a great idea, until they come for yours. The concept of "let's give people freebies" seems nice too, until they coming asking you to pay for it. Let's give away less as political graft and extort less from the unwilling, and see how that works for a change. If Obama wants to give away money, let's let him and his cronies pony up their money first.

I'm game! Subsidies and pork need to go first, then spending cuts across the board, then taxes to match!

Really, taxes, regulations, unfunded mandates, subsidies, hand-outs, rebates, and ear-marks are simply public policy tools, abused by our pandering leaders. Even those here cry for incentives and spending for solar and wind, but that's just (arguably much better) versions of the same.

When gov't shifts from "spend what you want, tax what you can, and borrow the rest" to "figure out what we can stand to tax, pay the debt first, and then spend only the rest" we'll be on the road to recovery. I don't think we'll live to see it, though!

In the USA, you have two political parties-the higher taxes, higher spending and the higher deficit, higher spending. Lower guv spending is not happening in any event until they destroy the currency completely.

figure out what we can stand to tax, pay the debt first, and then spend only the rest

Figure out what we can stand to tax. Historically 80% to 90% marginal tax rates on the highest incomes seems to be the upper limit.

Pay the Debt First ? Interest on the debt is always budgeted first. As for paying it off, GWB inherited and economy and tax system that threatened to pay off the debt in 10 or 12 years. This is the ONLY threat that GWB can be truly credited with eliminating.

Sweden paid off 18% of their national debt a couple of years ago (Under teh Social Democrats). Some structural issues with such a fast pay-off, so the newkt elected conservatives (Magnus Redin works for the party on infrastructure & energy issues) increased spending on infrastructure (energy efficiency a critical priority. several % more electrified rail for example) and cut income tax rates for the lowest third of income earners (nothing for investment income). Payoff (I think) is down to 3% to 5% of the national debt each year.

Let's start with a fair tax variant, and then see how 80% feels. You can't expect others to pay a higher rate than you do, and having the option of paying none (by spending none) would enable each to choose his pain point. I'll even go liberal and let you deduct raw food items and have rationing for gasoline -- how's that for progressive?

Most of our debt is off-budget -- future medicaid/medicare and social security costs, GSE debts and liabilities, and future debt refinance accounting is all missing. We "pay as you go" for refinance costs presuming eternal debt, not for expenditures. We're like the consumer making minimum payments on the 1.9% starter rate credit cards, conveniently ignoring the 22% reset due in a few more months.

And I agree with you about GWB -- he's a big gov't, centralized power, middle-road social position kind of guy -- certainly not a conservative of my ilk.

Let's go do what Sweden did. But we gotta unwind our big banks and investment houses first, and let all the GSEs go bankrupt. Then there will plenty of houses available cheap .....what's better for the little guy than that? Gail's house of cards will fall down though.

Maybe that's the next round of realization after peak oil -- the economy WILL crash, and the sooner, the better, since we still have some resources left right how?

You and not I stated that we should start with the highest taxes we can stand. I noted the historical fact that was 80% to 90% FOR THE HIGHEST INCOMES was the maximum rate. I will concede to Laffer curve that the highest tax revenue rate may be a 60% to 67% marginal rate. Any lower and the extra income earned is offset by revenue losses.

Applying the "fair tax" (aka as "The tax Rich Guys want") is exactly opposite of the maximum taxes we can stand. It sets the pain threshold on the lowest income earners and lets the high income earners get away with the lowest possible tax.

The opposite is true. The highest possible taxes are severely progressive and there is no good or fair reason to tax minimum wage earners and NFL players and XOM executives at the same marginal rate.

I support a 0% bracket and a 10% bracket for every NFL & NBA player, every executive, every lottery winner (state sanctioned PowerBall or birth lottery) and all of us. But progressive rates above that.

At this time I do NOT support your stated goal of extracting the maximum taxes possible (it seems at odds with your other position of having the rich pay as little as possible). But if the times require the maximum taxes possible in the future, we can certainly still "soak the Rich" with income, estate and property taxes.

We do not need to raise taxes to the maximum possible rates (note plural), we only need to raise them by $600 to $700 billion in 2009 to balance the budget. The large majority of that can, and should be extracted from families earning over $200,000/year with higher marginal income tax rates. Other monies from higher inheritance taxes, gas taxes, capital gains and dividend taxes, tariffs, etc.

I have zero interest in a percentage of 80%, or 67%, or in any way maximizing taxation at all. I think we should cut programs to balance the budget, and then cut some more. I will never believe the first answer to budget shortfall is to tax more. It's like saying to an average suburbanite that he needs to earn more. No, he needs to ALWAYS live within his means, and then seek to earn more before he seeks to spend more. That is doubly so when you're a gov't spending OTHER PEOPLE'S MONEY!

The goal shouldn't be to see how much taxation we can live with, but to see how many programs we can live without. Maybe 15% is a good goal -- 5% local, 5% state, 5% nat'l. The nat'l gov't can pick up some extra dollars for defense via international tariffs -- it'll be good to have them bickering with peers rather than stomping on us.

The goal should be to promote savings and investment, and discourage wasteful spending. Sure, a rich guy can and WILL spend a lot more, and will pay way more than his share in taxes. If you want to be progressive, let's tax loans (corporate and individual), especially leveraged investments.

I don't see how any flat rate can be regressive -- the richer pay more, the poorer pay less, in absolutes. As a compromise, though, relieving sales taxation on an individual home mortgages up to median value, home utilities up to the national average, and food and drugs would be quite progressive. Anything would be better than the tax-every-point, tax-to-the-max mechanism we have now, which is the most regressive of all as it has loop-holes for the wealthy, deductions for the middle-class, and income rules and strings attached for the poor.

IMO it is fairly difficult to maximize tax revenue (not that I am endorsing that goal) with Progressive income taxes. That is because a lot of income (small business, charitable foundations, ...) is off the books and therefore you are only going to be able to soak "honest" taxpayers.

People with money like to invest in property and therefore it is property taxes that must be raised. Property and in particular real estate is difficult to hide.

In this country that will never happen, since the folks that own a lot of property and shield their financial assets in "charitable" foundations are politically powerful.

I am owed back the tax deductions that XOM took for funding Global Warming deniers. And the for $399 million of the $400 million tax deduction for retirement package of the azzhole who planned this campaign of ExxonMobil. With interest.

Most "Big Oil": companies are no longer in the business of finding and developing oil, just producing oil like Royalty Trusts.

Certainly there is a lot of regulatory graft in the tax law. The Harvard Foundation makes enough money to have free tuition for all students, thereby creating a meritocracy for education, but instead uses its money and tax-exempt status to fund politically aligned groups.

And certainly Big Oil has benefited from gov't favors, just like big-cattle and big-lumber and other national-resource-based companies. The fact remains, though, that we have few tools to use compared to Russia, China, Saudi, Venezuela, and other nationally-sponsored oil companies that are buying up world reserves for other than free-market sale.

I personally think that stockholders and board members are to blame for exec compensation, and all are derelict. Corp boards are largely a sham, as I've seen from inside, and too many public companies are run like private companies.

I can deal with regulatory change, but "more taxes" is never my first recourse to a problem.

Having a gov't that feels comfortable changing the rules to take private money for public good is a dangerous step. How will the public feel when the gov't suddently decides that 401K funds should be forced to invest in wind power or grid projects? Or to buy up the remnants of Fannie Mae? Or the pension liabilities of GM? Or the long-term liabilities of Big Oil? It's a slippery slope indeed.......

You're looking at the big government question and the behaviors of private elites as though they were unrelated. The reason shareholders allow executive compensation to run amok is that the shareholders and the executives are in fact a ruling class. This is how classes form, by common interest and power (or lack of power). They are loyal to each other, not America. When we had small government in the wonderful orgiastic paradise of the Victorian era, the rich simply ruled like hungry monsters, sending rent-a-thugs to butcher union organizers, building sweatshops that burned down with women and children trapped inside, raising the cost of coal in the dead of winter, and turning banking and stocks into the Ponzi scheme that collapsed in 1929. That is the normal behavior of a class with unrestrained power. Wealth and income were becoming more concentrated in their hands under that system, so there was no "market" solution to regain justice. None. Stop pretending.

Now if Big Business is simply behaving normally in committing these crimes, we have four options:

1. We make government big enough to fight back.
2. We make a one-time forced redistribution, like the Greeks used to do in ancient times, and then start over again until the next revolutionary crisis.
3. We intentionally destroy most of our technology and decentralize everything to the point where even banks can't function, and then start over again until the next overshoot crisis.
4. We surrender our humanity and become an industrialized serfdom.

Now we tried #1, and the rich bastards just waited until enough of us forgot how horrible life was for most of our laissez-faire ancestors and brainwashed us with the GOP and the Heritage Foundation and the Cato Institute and the Southern Baptist Convention and the military-industrial complex, to steal every tax dollar for themselves and slander all other recipients as welfare ni**ers. So we ended up with #4 anyway, except we don't even have any industry left.

However, #2 and #3 are no good because it would take less than a generation to make all the same mistakes again. The Greek revolutions worked because once land was redistributed, every farmer was about as good as any other farmer, and it took time for the landlord tyranny over debtors to rebuild. But now we have a class with connections and "skills" that would allow them to quickly rebuild their Enrons and Halliburtons under new names.

Ah, but this is where Peak Oil comes in. Once the brainwashing communications network and the consumer economy that funds it fall apart, we will really have to start over from several generations back. Problem is, a whole lot of people will starve in the interim.

Now I can work with #2 because I know the rich will commit exactly the same crimes that they committed in 1870, ceteris parabis. The workers in those days knew what to do - they used violence. You bring back 19th century conditions, we bring back the red flags and bombs. That's the deal. If we have to do this a dozen times over until we don't even have any coal left, fine. If you don't want it that way, you better find a way to prevent the maldistribution of wealth from approaching infinity, a way that can be enforced without ol' evil Big Government. Presumably, that would be a feature of approach #3.

The reason I keep coming back here endlessly to needle all you neocons, theocons, cryptocons, and paleocons is that you all deserved fair warning. Class warfare will not end in a blissful survivalist paradise.

P. S. The game "Monopoly" was originally created by a socialist who wanted to demonstrate to people how, once one person gets more money than everyone else, all forces move in his favor until he bankrupts everyone else. "Monopoly" was a closed system with no technological improvements or resource expansion, and thus is more like a post-Peak world than the one we've lived in. Parker Brothers obtained the rights to the game, but not from the original inventor, who got squat. I doubt he was surprised.

P. S. The game "Monopoly" was originally created by a socialist who wanted to demonstrate to people how, once one person gets more money than everyone else, all forces move in his favor until he bankrupts everyone else. "Monopoly" was a closed system with no technological improvements or resource expansion, and thus is more like a post-Peak world than the one we've lived in. Parker Brothers obtained the rights to the game, but not from the original inventor, who got squat. I doubt he was surprised.

If nothing else, we are owed an explanation of how the public's oil assets (continental shelf, public lands) are being managed and why the public does not seem to be sharing in the windfall coming from high market prices. How are the leases structured- does the public get anything when prices go this high? Where's my sovereign wealth fund?

This is perhaps a fair complaint for new leases, but if the leases were let 3 years ago for a fixed rate would it be fair to change the multi-year lease terms just because it turned out to be profitable? Certainly lots of contract negotiations would be viewed differently from a peak-oil viewpoint than an eternal-growth viewpoint. Locking in long-term prices seems like a good deal; selling such rights seems pretty silly, doesn't it?

Another approach would be rationing of US-produced oil for US needs at a lower short-term cost, but that wouldn't help much long-term.

The US has a family of sovereign debt funds, not wealth funds. Believe me, you have your share!

This whole notion of "let's go get somebody's money" seems like a great idea, until they come for yours

The government has a long history of taking private assets for the public good. How do you think the interstate highway system was built? For years, conservatives have staunchly supported taking land for highway projects, labeling anyone in opposition a NIMBY crybaby. Now all the sudden there are calls to take assets from an irresponsible multi-national corporation for a public good and conservatives are shedding crocodile tears. Funny!

For years, conservatives have staunchly supported taking land for highway projects, labeling anyone in opposition a NIMBY crybaby.

Only neocons - big-govt, big-spending pseudo-conservatives - want to build big projects for the populace. There is a reasonable civil defense aspect of nationwide highways, though, but that need is far less than what we have now.

But it should be clear that eminent domain takes property with fair compensation, while taxes take money without compensation, and generally without any reasonable return value at all.

Value is maximized when the person paying the price negotiates the terms and receives the product or service -- when one person pays, another benefits, and a third determines the terms nobody is happy with the result except the professional negotiator (bureaucrat).

There are quite a few well right of Reagan but left of Paul. It does get lonely sometimes, though.

I've long thought that "right" and "left" were too limited, and we need more dimensions for overall gov't size (big/small) and organization (central/distributed). Left and right can stick around for general socioeconomic perspectives.

I've long thought that "right" and "left" were too limited, and we need more dimensions...

Exactly. Right and Left just don't do a very good job of describing things. I've got views that would be considered right, some left. But most people don't seem to think things through to that level. It's just right or left, conservative or liberal, republican or democrat. And we've twisted the meanings of those words so far that they don't really mean anything anyway.

They don't want to build big projects for the populace. They want to build big projects for corporations. And defense, as you mention.

And to be fair, we would not be where we are today without government funding. Tax dollars built the airports and air traffic control systems that make commercial aviation possible. Taxes built the roads and bridges that allow companies to ship their goods across the country and created our car culture. Ditto communication, water supplies, and all the various enforcement agencies. The police that prevent theft and violence, the SEC and other financial regulators that allow investors to trust the market (hah!), the military to protect our investments overseas. All these things might benefit individuals, sure, but they benefit corporations more.

Of course, it's kinda not turning out well. But I doubt the average American wishes commercial aviation had never gotten off the ground, or that the interstate system had never been built.

My perspective is that gov't works well when it has reasonably willing support from the many to undertake massive programs that cannot be done readily by individuals and corporations.

At the local level, a greater role in organization makes sense -- many of the values you list are local. At the national level big infrastructure and long-term payback items make sense -- national roads, air infrastructure, nuclear weapons, and even moon-shots make sense. The military, when reasonably managed, fits in here too (and in my view is the only one of the above that shouldn't have needed an amendment to fund it!).

When you take a little from many and put it one tightly controlled program, amazing accomplishments can result. Taking from some and giving to others rarely works out well and is rarely "right". Taking from the future and giving to the current makes even less sense.

I once heard that liberalism works best at home -- a family can exist nicely with "from each according to his abilities, to each according to his needs", with the inevitable oligarchy (parents, hopefully!) retaining power. As you scale through local, state, and national levels the reverse is true, and each should be increasing responsible for his own welfare. The urge to give and take to balance outcomes creates adverse incentives, and then seems to inevitably to taking all and giving all according to political whim as power centralizes.

I once heard that liberalism works best at home -- a family can exist nicely with "from each according to his abilities, to each according to his needs", with the inevitable oligarchy (parents, hopefully!) retaining power.

I don't think that's "liberalism." Sounds more like "socialism" to me. Classical "liberalism" means a level playing field, and everyone is free to play. Of course, the devil is in the details -- who levels the playing field?-- for example.

Let's start with an energy policy that is not oil-centric before we run around nationalizing things. Part of our crisis mentality is that all big-gov't advocates are now adept at seizing upon any happening as proof of a previously missing regulation and reason for a new round of gov't controls. Rights are a zero-sum game, and every incremental expansion of national gov't rights is a decrease in state, local, or individual rights, or a combination.

If you want to nationalize things, I think you need to start with an amendment. Or you could buy a SC justice or two -- that seems to work well too.

I feel that our media and pols are looking for somebody to blame, rather than looking for solutions.

Even libertarians can get caught up in things that seems like good ideas. If roads are great, toll-roads should suffice. The gov't can help organize, but not tax and fund, IMHO. I haven't checked out Reason yet, but I will. I am willing to change my assertions if new info proves me wrong.

Devaluation of society? Based on oil prices? If you want to discourage consumption, tax the oil. If you want to discourage production, tax the production of oil. If you want to discourage business, tax the business. Seems like you're looking to punish business to me...

...and if you want to encourage profits, don't make investments that will reduce the price of oil, invest in creating dependency. This is the problem with privatized oil.

I support gas taxes but they disproportionally affect the poor. Raising taxes, royalties and/or regulation of investment decisions (i.e. on renewables, refining, advertising and global warming/peak oil propaganda) and ending subsidies is a way to tap the same revenue stream and obtain a similar outcome. This is mostly what I think the best form of "nationalization" would be; however, I don't think an amendment would be needed to nationalize the oil industry entirely.

All good points. But I think folks need to focus on what the “wind fall profit tax” is likely to be. First, it can’t be a on profits because corporation are already taxed on profits and the gov’t cannot charge different tax rates to different industries. So I can only assume that the “windfall profit tax” will be done as it was in the past: oil companies will be required to give the gov’t $X for each bbl of oil they sell. XOM sells 10,000,000 bbls of domestic production to Valero and they have to give the gov’t X times 10,000,000. Of course, that won’t reduce gasoline/energy prices since the refiners et al are still paying the same price for their oil. And we can only assume that all the auto, teacher, police, etc union members as well as many more millions of retirees will support the WPT. A very unselfish act on their part considering the trillion of dollars they’ll loose in their stock funds since they are the majority owners of Big Oil. (Don’t ask….look it up…it’s an easy Google search)

I won’t take anymore of the threads time. If you want to see the net impact on the economy of a WPT go search reports done BY THE GOV’T the last time this was tried. From a personal stand point I would have to support a WPT: as a petroleum geologist that owns no oil stock I’m all for anything that drives down competition and raises petroleum prices to the public. As a patriot and a compassionate person it will bother me to see the additional damage to the economy, but I’m should accept the will of the people and play along.

Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) is at least five years away from manufacturing big numbers of plug-in electric vehicles for the mass market, an executive said on Tuesday.

"We're clearly at least five years away from starting what I would call the ramp from very small volumes to substantial volumes," Nancy Gioia, Ford's director of sustainable mobility technologies and hybrid vehicle programs, said in an interview.

"This is really a system that has to come together and it's not just, 'Throw some product out there."'

Gioia declined to say whether a Ford mass market plug-in would be a small or large vehicle.

The big 2 will shortly decide to go through bankruptcy to shed their load of pensions. They've already started cutting back on medical coverage, and before long they'll go "bankrupt" due to these carrying costs and seek to shed them in a bankruptcy, I think.

What's left will be perfectly viable. Both companies would be relatively "healthy" if they shed their US businesses.

I don't think anybody should plan on collecting any pensions. Plan to work at something productive if you expect to eat, I believe.

Isn't there precedent for big auto bail outs? I mean as long as we are having the dollar blow out bash, why not bail out an industry that we have bailed before for "nation security reasons" or whatever bullshit they gave before.

In the recent past there has been a lot of discussion (also here on TOD) about oil prices and the role of speculators. I am neither an economist nor an expert in commodities trading, but I found the arguments "in defense" of the speculators very convincing. Also, being "peak oil aware", I have no problems attributing the high oil price to fundamental supply issues.
Having said this, something is still bothering me: It doesn't seem logical to attribute all the price fluctuations we are seeing simply to fundamental offer/demand processes. We are seeing a period of high volatility, with oil prices raising or falling by 10-20 USD in a matter of days. Nobody can tell me that this reflects a variation of the fundamental value of oil (as defined by offer/demand) within hours or days, even without "big news" making the headlines.
So what is causing such fluctuations if it isn't the traders/speculators? How come that "the market" values oil today so differently than yesterday? Or is it that supply/demand causes a long-time price increase (because of PO) and the speculators cause the volatility on top of that?
I have the feeling that I'm missing something .... Who can help? Thanks!

You're not missing anything. The thing is almost all traders/speculators have no clue. They have short term visions only (in order to profit) where sentiment is a very important factor. So if the news comes out Americans drove 10 billion miles less in May then last year, oil prices are dropping. After that they learn inventories are lower then expected and bang! up we go. Possibly new (higher) unemployment figures may drive down the price again, followed possibly by another MEND attack or tension about Iran and the price goes up.

I am no expert either. my take on things is pretty simple. Imagine a sealed tank of a fixed volume. suppose that it had a special valve which would let air in and out, but would not let water pass. Tank volume represents our supply. Demand could be represented by the amount of water. The variable or price could be represented by the pressure in the tank. If you start filling the tank quickly, faster than the air can vent, the pressure may go up slightly, and conversely if you suck a large amount of water out faster than the pressure can equalize, you get a short term vacuum. This represents what we are used to with pricing changes. If you fill the tank slowly when the tank finally gets full, the pressure then skyrockets. At that point it would take only a small change in the "demand" to spike the price. Likewise after the pressure jacked up in the full tank, a very small leak off(demand) would drop the pressure (price) dramatically. Again, simplistic but it lets me vizualize things a bit easier. hope it helps.

We debate a lot of stuff here, and everyone has his own preference for what to do (except maybe PG, who I've never been able to figure out), but the reality of them all is if we didn't do anything during the last twenty years when energy was cheap, the economy was growing, and there was money to put into infrastructure, I'm fairly sure that nothing big is going to happen when we've started on the way down. Perhaps the dealmakers realized that any billions used on power plants can't be used to save banks.

It’s The End of the World or How I Learned to Stop Worrying and Love Peak Oil

“People cannot stand reality for very long.” T.S. Elliot

For me it all came to a head about a month ago. I left an appointment and I was hungry and I stopped at a sandwich shop to get something to eat. I was sitting outside eating and I noticed the parking lot full of large trucks and SUV’s, a line of cars at the Starbucks drive-thru, and I had a view of a 4-lane service road and an 8-lane freeway packed with cars racing to and fro. At the same time I could see a city road crew repaving the service road with a huge conveyor machine stripping the asphalt into a dump truck while at the other end another large combine was laying fresh asphalt behind it with steam-rollers etc. Then my mind began to play tricks on me. It expanded this scene to a city then a county, a state, a country, a continent and finally to a world with six and a half billion people on a rapidly dieing planet carrying on with business mindless of the consequences. I sat there for over an hour paralyzed in a state of fear and loathing.

By nature I tend to be morose so I was attracted to the concept of Peak Oil. My history with Peak Oil is probably not unlike a lot of other Peak Oil watchers. Initially I optimistically thought that it would be an adjustment that mankind would make. But over time I became what is not-so-gently referred to as a “doomer”.

I first became aware of Peak Oil about four years ago. I read a small book titled ‘Out Of Gas’ by David Goodstein which was a good Peak Oil primer. I shared it with a few of my friends and I talked about it a lot. After a while I got busy and I forgot about it…

Then I saw a Peak Oil presentation by Jim Kunstler which motivated me to go out and buy his book ‘The Long Emergency’ and ‘Geography of Nowhere’. Since then I have read over 20 books dealing with Peak Oil, Climate Change and human overpopulation featuring:

I also discovered The Oil Drum. The Oil Drum immediately became my home page and I obsessively read thousands of posts and news stories related to Peak Oil. Online personas like Professor Goose, Leanan, RobertRapier, Darwinian, AlanfromBigEasy and WestTexas became more real to me than my own family.
I watched the price of Crude Oil like a commodity trader. I convinced my wife to rent our house in the burbs and we moved to a community in North San Diego where I can walk or bike and there is light rail. I traded in my SUV for a hybrid and I quit eating red meat. I also annoyed and pestered my friends and relatives with Peak Oil Presentations.

Over time I noticed that my appearance changed. I grew a beard. My hair got long and I would forget to get it cut. I gained over 10 pounds after I stopped going to the gym because I felt guilty driving to the gym because it was too far to ride my bike. I stopped going to a tanning booth because I believed it was immoral to waste energy on a tan and as a consequence my legs and chest are pasty white. I avoided social events and lost interest in small talk.

Also my business began to suffer. I’m a Realtor and besides witnessing one of the worst Real Estate slumps in history* I was personally becoming seriously depressed. I would drive to neighborhoods and view McMansions on tacky cul-de-sacs and I would get a sudden impulse to take a can of too cheap gasoline and burn them to the ground. (For the record I never acted on any of those impulses.)

I told my wife about the event at the sandwich shop and she begged me to go and see someone. I agreed and I went to see a young therapist. I told him my views on Peak Oil and I even convinced him to read The Long Emergency. I told him that being a Peak Oil watcher is like ‘…watching a train wreck in slow motion, one frame at a time. It’s horrible but I can’t take my eyes off it’.

He however was more concerned with my psychological condition so he put me on a mild anti-depressant as well as informing my wife that I cannot read the Oil Drum more than 30 minutes a day. I have joined a small gym close to home where I can ride my bike to and I am again taking clients to properties that they might want to buy. I advise them about the school district, comparable values, assessments and I assist them as a professional Realtor. I don’t share my views on Peak Oil anymore though. That’s not part of my due diligence. I think that before too long I may cease being a Realtor altogether but in the meantime I have to keep my balance.

I think we are currently at the plateau of Hubbert’s Peak right before we start the long inexorable decline. Like any other force of nature I can’t stop it and I can’t do anything about people’s cavalier attitudes. Perhaps people aren’t equipped to deal with threats in the abstract. The last week as I’ve watched crude oil prices dipping dramatically I hear the chattering classes anticipating a return to BAU. How sad!

I have to go now. My wife tells me my thirty minutes is up.

Joe

*San Diego overall has lost more than 30% of its value in the last 2 years.

Joe: If you are in a walkable area of SD maybe you should lighten up. The place has fantastic weather and IMO has a lot brighter future than most parts of the USA. Currently, IYO what is the best buy on the market there you have seen?

I can't believe you've been peak oil aware this long and are still a Realtor! Run, don't walk, to the non-discretionary side of the economy. At the very least, find some way to transition into property management, as the residential rental business is one thing that will be going up.

Sounds all too familiar. I'm still depressed too, now and again.
I suggest you quit the drugs, as mild as it may be. Try to restore your sense of humor (plenty of it here on our TOD).
You say your mind played tricks on you. Forget about it. The mindless crowd you were watching have been tricked. Not you.

A therapist or drugs will not evade PO blues, because PO is here, and it's real. To quote Matt Savinar, "you can pretty much kiss your *ss goodbye". But not today, not yet. Everyone, except a few, I lectured about PO turned me down. So I don't do it. Enjoy the small things in life.

It's a big leap forward if you are just mentally set for the coming changes, the hardship. That puts you way ahead of the rest. And you are. Accept to make do with less. I lost my left leg to cancer 20 years ago, when I accepted the possibility of dying soon. No one is immortal, keep it in mind. I won, so for me it's easy to enjoy, even with 2 small kids growing up in a much uglier world. And yes, I'm worried, scared, afraid and terrified. We'll have to drag on somehow, though. These PO and CC thing is not going away, but it doesn't mean you cannot have a meaningfull, happy life now.

I dont think you are the one who needs to seek professional help. Its the 6.5 billion other people in the world that need to come to terms with reality! You are seeing things for what they really are, like most of us here on TOD. We dont like what we see, but it is what it is and we have to deal with it and adapt to it.

Ha, Ha, Ha, Ha, Joe, I couldn't stop laughing! Not to make light of your situation -- not at all. I know it well. I think I speak for everyone here when I say "We feel your pain." It's been 4 or 5 years since the scales came off for me and I still have days where I'm just functioning -- going through the motions while fighting the urge to climb into bed and pull up the covers.

My wife has been listening to my daily rants (a very patient woman, obviously) for several years. I'd recommended that she read "The End of Oil" -- Paul Roberts book -- a couple of years ago as I thought that would clue her in without scaring her. She read it and it seemed to make an impression without shaking her up too badly, but recently, I brought home a copy of "World Made by Hand" and she dove into it. She hasn't been the same since. She's still the calm, patient one in the house (My mood swings are sort of a bumpy plateau) but we are now preparing for the day TSHTF -- at her insistence. When we recently considered our heating options (currently LP gas + woodstove -- we are in New England), she nixed the wood boiler ("too much technology") in favor of a tile furnace. She says the next thing we need to do is to add a hand pump to our well (probably not a bad idea). This year the garden doubled in size and will do so again next year.

Bottom Line: Don't let it get the best of you. Like spudw says, you've got your head on straight -- it's everyone else who has a problem. Think of what a good "listener" you will be when the others start figuring it out.

P.S. Don't let the job duties get you down. Put your knowledge to work for your clients, as best you can. We're all trapped in a dying way of life and we are all going to have to ease out from under it while simultaneously holding up the roof (so things don't collapse too quickly).

My wife calls this daily thread the "DownBeat" because Leanan leans strongly to the negative in her selection.

May I suggest, if you have a tendency to be morose, don't hang out with other pessimistic people since they feed off each other emotionally just like happy people do.

Sometimes people present peak oil as if it is an emotion rather than facts about part of the energy supply. So, they place lots of emphasis on being "concerned".

All this can lead to defeatism. Defeatism kills. And I mean that literally. Most suicidal people have an unrealistically negative view of what's likely for them in the near future and don't grasp their own capacities for adaptation. That latter point is key: the suicidal person will quote all kinds of facts to you. Where they are wrong is on the emphasis and the interpretation and the assessment of options.

My attitude toward peak oil is similar to Pickens. I've lost the link but there is a youtube video of him at an ASPO conference where a reporter (following him down a corridor) asks something like "Will this sink the United States?" and he impatiently replies "No, we'll get through this."

If alarmists get together and speak mainly to other alarmists they will clusterfuck their own lives rather thoroughly. And they will do damage to others.

We just need first accept and understand the following: No gas guzzlers, use bikes more, use public transort more, be less wasteful with food, reduce debt, make more, localise recreation, work, food, school etc (basically what WT says), get the community spirit back up and running, make your own compost, use less electriciy, insulate your house, when replacing appliances, only buy energy efficient and on and on and on.....

It is a bit like my Bus argument last week! There are so many simple low tech/uncostly solutions to the problem that would buy us more time if only we change our lifestyle - but you watch what happens when any politician tries to tell us how to live our lives and watch his ratings make a hole in the floor.

I think now we have to get to the stage of mass suicides before the general public and poiliticians finally take their head out of the sand and acknowlegde that 1) there is a problem and 2) start to do something about it!

What we can do is irrelevant, because anything "can" happen, at least in theory. We can stop war tomorrow--just get everyone to agree to stop fighting. That isn't to say that optimism is without value--your mandate to 1) identify the problem, and 2) start doing something about it is almost the right answer in my opinion. What it's missing is an intermediary step informed by a healthy dose of pragmatism--figuring out what to do and how to do it. There are many stop gaps (some of which you mentioned), but none of these are "solutions" in my opinion because they only serve to buy us time while compounding the underlying problem.

the underpants gnomes are right! I see peak oil as validation as to the practicality of my various hobbies, as well as my foot in the door to the business of moonshining! If only it didn't have to result in the death of one Kenny McCormick...

I have to throw my lot in with you. I see this as a potential opportunity to improve quality of life, not an impending tragedy.

For the past six years I have lived in a Latin American country that has a per capita energy usage of about 1/6 of that of the U.S. And you know what? People get along. Housing densities are greater. People walk. They use public transportation. They don't run the air conditioner (Ha ha! They don't have an air conditioner).

From my point of view, I liked it better when I first arrived. Over the last six years there's been a marked cultural shift towards consumerism. I think people were actually happier before. This is not to dispute that consumer goods are like cocaine. Once people get a dose of them, they think they have to have them.

I first saw the following article posted here on TOD. I've since posted it a couple of times, and I'm going to post it again, because I think there's so much wisdom inherent within:

I know the transition will be difficult, but I just can't help believe that once one is off the drug-like addiction to consumer products, life won't be all that bad. And you know what? It might even be better.

You're point is quit valid and enviable. Unfortunately, ten's of millions of folks in the US make a living supplying consumer demands. A sudden drop in that demand via a rapid arrival of PO will leave them unable to provide for themselves. The US has designed this trap for itself by switching from a manufacturing base to a service industry base. At the moment those 6000 Starbuck's employees who lost their jobs might find replacements. But when that number jumps to 6,000,000 with no new job growth thrown in the switch will be to desperation and not simplicity. You may not be old enough to know an old cartoon character called Pogo but he said it best: “We have met the enemy and he is US.”

You're certainly right that if the change is too rapid people will be unable to adapt fast enough.

I suppose I'm hoping that when peak oil arrives there will be a long plateau, followed by a rather gradual decline.

Of course when that plateau arrives (maybe it already has!), a nation and its people must then make the right choices.

Of the four hosemen of the apocalypse, the three I fear are War, Famine and Conquest. A rich nation like the United States, assuming its economic and political center holds, should have little problem shielding a majority of its citizens from the ravages of these three. Our wants may be limitless, but our needs are basic.

If the nation and its people make imprudent decisions, however, there can be no salvation. And here I'm talking about people driving Hummers while others starve, about squandering the nations wealth and energies on endless resource wars, about singling out certain groups within the nation to demonize and scapegoat for broader social and economic ills. If the nation elects to go down that road, there is no end to the suffering that will occur.

I know the transition will be difficult, but I just can't help believe that once one is off the drug-like addiction to consumer products, life won't be all that bad. And you know what? It might even be better.

Now I happen to agree with you about the end point. As a kind of techno geek I can get enthused about saving energy via neat technology. At least for me, that causes me to get enthusiastic about looking for other savings (like do I rally need X?). So I view the techno half fixes somewhat differently from you, as a means to get people thinking about the possibilities for using less, and for changing their value system from "consume as much as I can" to something resembling "consume as little as I can". I just think that bringing people along this path a little bit at a time is more likely to work, than exposing them cold turkey to the endpoint.

Through What? Marco, I think you do not understand this is not something that we "get through" because there is no "other side" to emerge into when we get through. You simply enter and never exit. At first you can get by with much smaller cars and mass transportation. Then what? I mean what do you do when there is no oil for smaller cars and mass transportation?

What do we do when millions are employed and cannot afford even those small cars or bus rides or even groceries? And the next year even more millions will be unemployed and the next..... During the Great Depression we eventually got over it. But this time there will be no over to get over. There can be no return to normal until oil supplies and prices return to normal. That will never happen. That is the thing all the techno fix and conservation folks cannot seem to grasp.

I'll agree with you and say that almost everything modern society has achieved been on the back of high EROEI ie cheap joules!

However this does not preclude a societal transition to a different way of living. In fact I would say (and suspect you agree) that the biggest barrier to this transition is socio-political and not technological.

But to accept there is another side to come out of at the end of the tunnel; you first have to have enough optimism that humanity/society is capable of breaking its current mould - so maybe the only way we could settle this argument would be to look at the past and say: "how have societies coped with crisis in the past that threatens their very survival?" - the answer to this is SURPRISINGLY WELL! Sure there have been virtual extinctions but there have also been many survival stories.

Sure there have been virtual extinctions but there have also been many survival stories.

Oh, I have no doubt that there will be survivors. And they will, if they are to survive very long, make a transition to a different way of living. The question is Marco, just how many will survive. I thought by the way you were talking that you expected everyone to survive, six point six and climbing. That just ain't gonna happen.

Sometimes people present peak oil as if it is an emotion rather than facts about part of the energy supply. So, they place lots of emphasis on being "concerned".

Datamunger, this is a key point where your perspective differs radically from mine (and I suspect many others'). I do not see Peak Oil as 'facts about part of the energy supply.' To me Peak Oil is not a problem. It is a symptom of the problem. Resource depletion (of which PO is but one aspect) and environmental degredation are symptoms of our society's/economy's unsustainable relationship with the planetary system which sustains it. So long as the impossible, perpetual growth in a finite system, is attempted, failure is inevitable. This is not pessimism. This is realism.

Most of the PO 'solutions' I see touted are simply 'technofixes'. They are procrastinations which, if successful, will only delay the inevitable. They won't fix the problem because it is a problem of attitude, not technology. Our reliance on 'Science' and 'Technology' can blind us to the fact that some problems do not have technological solutions.

Until the 'limits to growth' are recognized, and humans learn to respect the boundaries of the biosphere, disaster is unavaoidable.

If we always expand peak oil into the general question of long term sustainability for civilization, it will seem a much larger problem than it is.

Call it selfish, but many of us are interested in the question:

"What does peak oil mean for my family in the next 5, 10, 20 years?"

We can crunch numbers and get some preliminary answers to this. It's not that bad. Any of us can individually cut our oil use by 1/2 if we have a decade over which to do it. (no new tech at all) We'll have high prices prodding us every step of the way.

It's great that people are debating long-term sustainability. But to closely associate that with "peak oil" confuses the practical immediate everyday issues that we and our families face.

Incidentally, there's actually a very good chance that peak oil will bring forth technology that makes long-term sustainability easier.

You want to reorder people's priorities. That's fine. But if we do it by deceiving them with respect to their medium term prospects, we are hurting them.

Here's the challenge, Alan. Take any item from your list and spend a week on it trying to figure out how to cut the oil usage in half within 10 years. I think a smart guy like yourself will enjoy lots of success with that task.

But here's the kicker:

Extremely intelligent hard-working people who would make both of us look as dumb as fence-posts (me at least!) are going to devote nearly all their waking hours to things such as these. Because there is huge money and glory in it.

50% is rather conservative. That's with no new tech. And we are going to get lots of new tech! (and reworked old tech).

But regarding our personal household usage, I would go further: the average American household could get rid of 75% of oil within 10 years.

I've said this many times before, but I'm convinced we can easily cut electricity demand by twenty per cent simply through better management practices and the use of more appropriate technologies.

Yesterday, I audited a recreational facility built in 1965. The main building consumes just over 360,000 kWh a year and roughly two-thirds of this load is lighting related, much of it in the form of tall hat, black baffled recessed fixtures that were all the vogue back then. Deep inside these black holes were 60 and 100-watt long-life A19 incandescents that provide very little light because most of it is trapped inside the fixture -- worse yet, the dozens of wall washers where light can only escape through a narrow slot.

I can cut this load almost in half by substituting a 50-watt halogen IR PAR30. These IR lamps are 30 to 40 per cent more energy efficient than a standard halogen and a narrow PAR will greatly reduce the amount of light lost inside the fixture housing. Just by specifying the right lamp, we can double light levels and knock 40,000 kWh off their annual power bill.

I don't buy that. That money they are supposed to make isn't going to be there to be made. My sense has something to do with a line in the first paragraph of Odum's book that I'm rereading:

industrial man ... eats potatoes partly made of oil," and "money ... is fed back in reward for work done." The "information age" itself is a result of highly organized and cheap energy. That's not very hard data, only a sense.

Hard personal data tells me that if I'm spending a lot more time in my garden I'm going to have much less cash to buy labor saving devices. If I've waited until too late to buy them - or if society cannot make them until too late because its energy profile makes them unprofitable - then I will never have them.

It seems that under conditions of energy decline it will never make economic sense to develop energy saving technologies designed for a lower energy paradigm. The current, relatively lower price of energy will always make technologies based on future, relatively higher price of energy uneconomical during the development period.

Outside of robber barons, no one is going to get rich on the downslope of peak oil.

Most suicidal people have an unrealistically negative view of what's likely for them in the near future and don't grasp their own capacities for adaptation.

Doesn't this beg the question as to what happens to people who have an unrealistic positive view of what is likely for them in the not so distant future? Isn't that attitude how we got in this trouble in the first place? Suicide may me the choice of the depressed, but I suspect those whose illusions become shattered will lash out and kill not only themselves but others.

Actually, there's some fascinating research that suggests depressed people are actually the most realistic. The normal people are unreasonably optimistic. They think they have more control over their situation than they actually do.

Minor quibble--I think that the Yerginites (we don't peak for decades to come, worst case) are doing far more damage on all levels. What happens to people's psyche after they have exhausted all of their savings and maxed out all lines of credit trying to hold on to their "suburban dream," based on their conviction that high energy prices are temporary?

And of course Leanan is frequently criticized for posting Cornucopian point of view articles, so she must be doing a good job (of course, I realize you are not in the Cornucopian/Yerginite camp).

About 4 million people lost power with some outages lasting more than a month - the area that I was living in lost power for 8 days.

When you lose electricity, "normal" life simply stops and you go into survival mode. In the event, there was a lot of sharing and helping amongst family, friends and neighbours and it was, in some ways, a positive experience.

But there are three differences that I can see between this kind of crisis and Peak Oil:

1) Duration:
A lot of people had lived through similar extreme weather and knew about how long the crisis would last. It is a lot easier to endure when you have an approximate knowledge of when it will end.

2) Locality:
Battery radio still worked, so we knew the geographic extent of the damage. Also, we knew that there was an "outside" world where life was normal. And, we knew that a lot of help was being organized in the "outside" world. Several days after the start of the crisis, I saw a large convoy of orange hydro-repair trucks coming down the highway (I think they were from NY state). It was a very emotional moment that is hard to describe.

3) Causality:
It was very easy to understand the cause of the problem - all over the place, there were trees fallen onto power lines. The solution was also very clear - cut the trees away and put up new lines.

Peak Oil is likely to be very different.

Duration:
We haven't lived through something like this before. Nobody will be able to say with any certainty when (or if) the problem will be over.

Locality:
This will be a worldwide problem. In general, there won't be any "outside" help coming.

Causality:
Most people won't know who to blame (except themselves, of course) or what the cause of the problem really was. And suggested solutions will likely be crazy and all over the map - we are seeing this already.

My fear about PO isn't that we can't survive with reduced energy. My real fear is that people are going to feel trapped and that there is going to be a very dangerous mass hysteria.

However, the pessimist almost always wins the optimist in forecasting of own abilities and prognosis for success (this is a psychological research fact). This is even after the optimist has been told he is systematically biased towards over-optimism.

That's why it makes sense to listen to what 'pessimists' say, when in fact they can be more realist in their forecasts.

But it doesn't require one to get gloomy - just understand also the downside risks.

Personally I find it very amusing that anybody who disagrees with the BAU over-optimism cheerleaders is labeled a pessimist, regardless of forecasting track record. Tell's a lot about the world we live in :)

The big misconception here is that the optimists on this site are not overestimating their abilities, but of the abilities of others to bail them out. They always post about new technologies that MIGHT happen, of possible new statutes to correct policy, of how if only the mass of people change their ways it will be better. Everything they espouse is wholly dependent on everyone else acting in unison and good fortune. Personally, I’ll make the “doomer’s wager”. If I prepare for the worst, and it doesn’t happen, I guess I’m stuck living in “god’s country” and eating good organic food and driving new fangled high tech vehicles, if the worst does happen I might have some chance.

If you are talking about technology like EEStor's ultracapacitor, you're right. "Might" is the operative word. Don't bet you're life on it. In fact, don't count on it at all.

But if we are talking about the arrival on the market of a car that gives 100mpg (or an EV), then I think 'might' is the wrong word. This *will* happen. To plan one's life as if it won't happen is imprudent. The reason for this is that no advances whatsoever are required to get there.

However, if one doesn't take the time to track developments in detail, it's easy to think the automakers are sitting on their hands.

And why is that? Let me guess - so you could profit off it? LOL! You just don't get it. It's not whether there are 100 mpg cars, but whether production can replace them in the time necessary, in a failing economy, with adequate resources, and whether they are affordable by everyone. Could happen. But might not. But in the end I’m prepared for either eventuality. Are you?

Some people can not afford an automobile now. Declining wages and automobile prices increasing faster than the inflation rate have been slowly pricing people out of the market for decades. There certainly can be fewer people able to purchase an automobile in the future. An attitude adjustment is just over the horizon powered by inflation, stagnant wages and unemployment. The Baby Boomers are a bunch of spoiled brats in their power years who have been funding the economy for the last 18 years. It will come to an end next decade as they retire and oil production declines. It is already happening from the high price of crude oil as the decline of the SUV is upon us. Things will change making the likely future lie somewhere between the extremes of BAU and societal collapse.

Ah...and we have lost some real storytellers during the history of TOD. Don the Sailorman, Airdale (still peeks in on occasion)...we used to have more folks talking up books, music and poetry. Not that I favor more of that, but they were heart-lifting and welcomed breaks from some of the pessisimistic realism we deal with here.

Good to know I'm not alone. I lost a sister who is 18 months my junior to cancer in July last year and then "discovered" PO sometime around December. Talk about a double whammy. I have been depressed as a result and my business has sufferred also. There have been times when I have been virtually immobilized, not wanting to do anything or go anywhere unless it was absolutely necessary. Living on a small island that imports all most of it's energy and a fair amount of food I have become very concerned for the future of my island nation. I have beought my 90 year old father on board but, that was easy. He's a PO kind of guy, been into composting, home gardening and conservation for as long as I can remember.

Since I consider myself a thinking animal rather that one that just "follows the herd", I have taken some decisions about what I am going to do with my new found knowledge. I am trying to inform my local policy makers about PO and the likely impacts on our country, some of which are already being felt. I have discussed using my father's six acre property for some sort of PO mitigation. We have one five month old Jatropha plant growing nicely and will definitely be planting more. I have bought 2kW of solar PV, Half for me and half for my father. I am investigating vertical axis wind turbines for urban use. I actually am thinking about transitioning from my current equipment rental business (entertainment) to a business in alternative energy (energy audits, system design and installation).

Whenever the opportunity arises I also try to steer my friends and business contact toward information on PO. A lot of people just don't "get it" but typically, I try to explain that, the current run up in oil prices is but a symptom of a greater challenge. I will probably spend the better part of the rest of my life, trying to do something about PO by providing information and advice to those anybody who wants it. My greatest fear is that the people who are least prepared for PO will make life unbearable for those of us who try to be prepared.

There steps that are more useful than others and I think I keeping oneself informed helps one to make good decisions about what steps are likely to be more useful. I thank everyone on this site for contributing to the information and the discussions that will hopefully help us all as we go forward.

Thanks for sharing, Islandboy. You're certainly not alone, and a lot of us feel the same alienation you and Joe Michaels feel. Once you get the "knowledge" it changes the way you look at everything around you. Frightening are the ways of denial...

I think for a lot of people the problem is the uncertainty. If I had a crystal ball and could tell you exactly what life would be like 50 years from now, people could relax and get on with whatever they need to be doing to get to that point (assuming that people believed me).

The other piece is that people need to be prepared to adapt. Some things that we currently do will no longer be workable in the future. If you stubbornly cling to it anyways, the transition will be more difficult. If you are prepared to quickly adapt, then life will be a lot easier.

This isn't to say that giving things up will be easy. I suppose the first step is to step away from the consumerism that afflicts our society. If you don't feel inclined to keep buying lots of crap then you won't be bothered by unavailability of those things that you no longer use. The less you use, the less of a problem you have. And one outcome of all of this is the phenomenal amount of debt that lots of people are carrying these days - to keep paying off all of this debt requires that you have a good job. The very definition of the rat race. Now clearly we have basic needs - food, shelter and clothing, for example, so it will never be true that you can reduce your needs to nothing..

Dude, North County is a great place to be for peak oil! Take it from a dude in the encinitas 'burbs. I successfully grow potatoes, sweet potatoes, 2 types of plums, apricots, olives, tons of grapes, radishes, and a ton of other stuff in my small back yard! If you are lucky enough to live by some fresh water, life shouldn't be too bad. If not you're probably going to have to haul salt water from the beach and desalinate it through evaporation (i'll have to do this). This is totally no biggy, the sun will do most of the desalinating for you, and you get table salt to boot! If you live further inland, you have it even better. The growing season is awesome in places like bonsil, and rain water collection is a lot more viable there. As for protein, at the very least you can raise rabbits. If you are by water, you can also fish. The things i recommend you do are:

1) DON"T PANIC -Douglas Adams, The Hitchhicker's Guide to the Galaxy
2) start a compost heap.
3) look up what fruit or vegetables grow in you area.

If you aren't in a very closely built housing area, I'd consider buying a 22 caliber rifle for the garden. This is the smallest and cheapest round you can get, and is really only good at picking off small critters like mice, rats, rabbits, crows, and other small garden pests. This might not be necessary, but it'll be damn helpful, seeing as rabbits are a pain around my parts.

Basically, peak oil won't be a cakewalk for anybody, but if you're looking for a place that a person can take it in stride, you found it here! As for your tan, there's plenty of sun to go around, even if it has been a disappointing summer in terms of weather.

if you have any questions about anything, just wing me a line at max{dot}steinhardt{at}gmail{dot}com

Beautiful - You have captured the essence of inaction as the train wreck approaches. Between this site and the Housing Bubble Blog, I am obviously "an optimistic" person. HA!

PS - The three raised beds produced this year and my new bike I bought with Amex points indicates that inaction is waning. I am trying to set a positive example; however, I am purchasing rice, beans, tuna and ammunition. Resilience is the Key!

Long time lurker, first time poster here. I've been on this site for a few years now and its become part of my required daily reading. Have to say this is one of the most informative sites on the net for energy related discussions and I thank all for everything I've learned over the years.

My reason for posting is that I know there are a few people on this site from Halifax, Nova Scotia and I'm wondering if any of you are interested in forming some sort of local peak oil group. I've been thinking about this for a while now and feel that the time has come to take the next step from thinking to doing.

In the beginning I was interested in forming some sort of group to raise awareness of peak oil in my community but now I'm more interested in forming relationships with like minded people to share ideas and to support each other. I say that because I'm long past the stage where I feel the need to inform people about an issue they don't want to be informed about so I'd rather expend my limited time and energy on improving my own situation.

And I know there are others in Halifax with a lot of knowledge in certain areas that I'd like to tap into and learn from. For instance, I've always read "HereInHalifax"'s posts on heat pumps with interest and I've love to learn more about his home heating system.

All that being said, while I'm past the stage of banging my head against the wall trying to inform others about peak oil, I haven't given up my hope that I can change the direction of my community and am actively trying to do that. This past year myself and another guy started a local cycling coalition with the aim of promoting cycling as a transportation option in this city. By the city's own admission, we are 10-15 years behind the rest of Canada when it comes to cycling infrastructure. The general attitude of our city planners is that it will be BAU for the rest of eternity when it comes to car centric planning but anyone who takes the time to dig through the city's budget knows that crunch time is coming soon,..very soon. As a taxpayer in this city I'm extremely concerned about our present direction and the system we seem intent on locking ourselves into. So my hope is to get my city to recognize that from a financial point of view, we can't continue our present path for very much longer and that we have to start giving ourselves options. I'm trying to frame the argument in financial terms because it seems to be a better motivator for change.

Sorry,..off on a tangent there,…back to my reason for posting.

If you do live in the Halifax area and are interested in meeting others who share the same viewpoints on energy and community issues, please email me directly at chrispATneap.net. I will compile an email list and then sometime in the next month or so I will try to plan a 'meet and greet' event where we can discuss some of these issues in person.

I'm not sure what form this group will take, even if it just provides a forum for us to sit around and talk every once in a while I'd be happy. Personally I'd like to talk about the larger abstract energy issues as well as the practical things like solar panels, heat pumps, growing food, etc.

Anyway, if you live in Halifax, Nova Scotia and are interested in this idea, please drop me a line.

Great to meet a fellow Haligonian on this board! I'd certainly welcome the opportunity to join you and others in establishing a local discussion/action group. I'll send you a quick e-mail shortly.

It seems I've become a sort of poster child for heat pumps (Lord knows I can't shut up about 'em). I get three or four e-mails a week from folks enquiring about these systems -- earlier this morning, I was contacted by a gentleman from Cornhill on Tweed in the UK.

His panels make use of glass as a substrate, with molybdenum applied as back contact, followed by the core component, being a compound semiconductor comprising five elements - copper, indium, gallium, selenium and sulphide, replacing the silicon - then cadmium sulphide as a buffer layer, followed by an intrinsic zinc oxide layer and, finally, a conductive zinc oxide layer.
Edited by: Martin Zhuwakinyu

How can all this be cheaper than silicon? And what of world resources of indium, gallium, etc.

Is this another scam? Or is it more enlightened to believe that the solution to the problem of "peak oil" is to use multiple sources of energy to replace the irreplaceable petroleum? The mix of wind, silicon solar, indium solar, thermal solar, hydro, geothermal -- and all the rest -- will somehow all have to figure in? Juggling all that is going to be a major challenge for a culture that is already far to complex to maintain.

..Meanwhile, agitated farmers continued their protests by staging rasta rokos on the highways.

Some even tried to immolate themselves in Karimnagar and Medak districts as officials failed to deliver on their promises of supplying fertilisers.

Sarpanch of Sheelapur village in Bejjanki mandal M Rajesham climbed a cell tower and threatened to commit suicide if fertilisers were not supplied to the farmers of his village.

In Medak district, nearly 1,000 farmers blocked the national highway for nearly three hours.

District officials expressed helplessness over the issue saying, only two lorry loads of fertilisers were available.
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Nothing to see here..Please move along.... Ammonia prices just jumped over $800/ton on the spot market... see my weblink on Euan's keythread.

..."I urge that we don't forget our roots," Mr. Bailey said.
Paul Bucciaglia, who farms the organic Fort Hill Farm, said he was "really heartened by the response" the ordinance had provoked.
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Now if I can only convince Tiger Woods of his right-to-plow golf courses. :)

It's so unbelievable it's just scary. They write: Since 2005, daily production has dropped more than 300,000 barrels per day, or roughly 10 percent -- and this at a time of historically high global prices.

And then that: But many analysts believe that Mexican production has peaked and will decline in coming years, according to the U.S. Energy Information Administration.

Mountain House Golf Course is closed, its grass dried and dying, and state investigators have raided the CEO's Redding office for evidence of alleged fraud that allegedly bilked several investors.
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As posted before: Tiger Woods & Nike paradigm shifting to Tiger endorsing Nike-brand hoes, rakes, scythes, saws, shovels, etc, could be a postPeak global game-changer. Tiger's popularity would skyrocket even more as he became perceived as a Peak Outreach leader.

Future Commercial?

Tiger: As I became Peak Aware, I realized that my children's future was far more important than chasing after a white ball. Becoming a Certified Master Gardener, then plowing under Augusta National was far more gratifying to me than any previous golf accomplishments.

My golf swing perfectly prepared me for having a wicked smooth harvesting swing with this Nike-brand scythe..... Nike is better than Nukes... available at all fine gardening supply stores near you.

KATHMANDU (Xinhua): The remote areas of central and far western Nepal are reeling under a serious food shortage owing to hindrance in supplies, natural calamities and almost negligible agricultural production, local media reported on Friday.

...According to a recent report of the World Food Program, soaring food prices and inadequate supplied have directly affected 6.4 million people across the country.

The report indicated that 2.5 million people in the rural parts of the country are in immediate need of food assistance. An additional 3.9 million people in the rural Nepal are at the risk of becoming insecure due to food prices galloping for last few months.
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Tell your kids about this, so when the same sad event is happening in your area in the future: they will be able to recall that TOD tried to warn everyone...

The report further says high population growth in some of these districts has interfered with crop rotation, which in turn has promoted the spread of the weed.

In the affected districts, the reports points out contributing factors may be inherent in the low soil fertility and decrease in use of fallow due to increase in population growth.

In some cereal producing divisions, the report estimates losses ranging from to 70 per cent to total crop failure, depending on the severity of the infestation.
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They had a machete' moshpit just a few months ago-- I guess the next one will be much worse.

It's wicked expensive, too. Over a thousand dollars, last time I checked.

But this particular article is just a regurgitation of an article that's appeared widely for free. He's saying conventional non-OPEC oil "will peak soon." That is not the same thing as peak oil as we mean it.

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